Which of the following is correct about futures contracts?
A)Buyers of futures contracts make a profit when prices rise.
B)Buyers of futures contracts make a profit when interest rates rise.
C)Sellers of futures contracts make a profit when prices rise.
D)Sellers of futures contracts make a profit when prices interest rates fall.
E)b.and d.

Question

Quizplus · Accepted Answer

Buyers of futures contracts are betting on the price of the underlying asset to rise in the future. Therefore, they make a profit when the price of the asset increases. Option B is incorrect because interest rates do not directly impact futures contracts. Option C and D are incorrect because sellers of futures contracts make a profit when the price of the underlying asset falls, not when the interest rates fall. Option E is also incorrect because only option B is false.

Which of the Following Is Correct About Futures Contracts