In the futures markets,speculators who strongly believe that interest rates will rise are likely to:

Question

Quizplus · Accepted Answer

If speculators strongly believe that interest rates will rise, they are likely to sell futures contracts on Treasury bonds. This is because when interest rates rise, bond prices fall, and selling futures contracts on bonds allows speculators to profit from the anticipated price decline. Buying futures contracts or buying Treasury bonds on the spot market would not be profitable in this scenario. Increasing the amount of money they currently lend is not directly related to their belief on interest rates and does not necessarily yield profitable returns.

In the Futures Markets,speculators Who Strongly Believe That Interest Rates