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

Question

Quizplus · Accepted Answer

If speculators strongly believe that interest rates will fall, they will go long and buy futures contracts on Treasury bonds. This is because as interest rates fall, the value of Treasury bonds with higher interest rates will increase, making them more valuable to hold. Buying futures contracts on these bonds allows the speculators to profit from this increase in value.

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