If a Financial Manager with an Interest Liability on a Future

question 1

Multiple Choice

If a financial manager with an interest liability on a future date were to sell Futures and interest rates end up going down, the position outcome would be:

• A) Futures price falls; short earns a profit.
• B) Futures price rises; short earns a loss.
• C) Future price falls; long earns a loss.
• D) Futures price rises; long earns a profit.

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Definitions:

Exploitative Child Labor

The employment of children in a manner that is morally, socially, or legally unacceptable, often because it is excessively demanding, hazardous, or interferes with their education.

Foraging Society

A type of society that relies on hunting, fishing, and gathering wild plants and animals for food rather than domesticating species.

Capitalist Society

An economic system where trade, industry, and the means of production are largely or entirely privately owned and operated for profit, characterized by competition and a free market.