To Exploit an Expected Decrease in Interest Rates, an Investor

question 24

Multiple Choice

To exploit an expected decrease in interest rates, an investor would most likely

• A) buy Treasury bond futures.
• B) take a long position in wheat futures.
• C) buy S&P 500 Index futures.
• D) take a short position in Treasury bond futures.
• E) None of the options are correct.

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Definitions:

Net Working Capital

Net working capital is a financial metric that measures a company's ability to pay off its current liabilities with its current assets.

Interest Expenses

Costs incurred by an entity for borrowed funds, typically presented in the income statement as a deduction from revenues.

Operating Cash Flows

Cash generated from the normal operations of a business, including revenue from sales minus operating expenses.

Hydromechanical Transmission

A type of transmission that combines hydraulic and mechanical components to control power flow and speed changes.