An Investor with a Short Position in Treasury Notes Futures

question 51

Multiple Choice

An investor with a short position in Treasury notes futures will profit if

• A)interest rates decline.
• B)interest rates increase.
• C)the prices of Treasury notes increase.
• D)the price of the long bond increases.

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Definitions:

Variable Inputs

Inputs in production that change in quantity depending on the level of output, such as raw materials and labor.

Marginal Cost

The expense associated with manufacturing an extra unit of a product or service.

Average Fixed Cost

is calculated by dividing the total fixed costs of production by the quantity of output produced, showing the cost per unit of output.

Total Variable Cost

The sum of all variable expenses related to the production of goods or services, which vary with the level of output.