Tom Buys a Futures Contract for U

question 97

Multiple Choice

Tom buys a futures contract for U.S. Treasury bonds and on the settlement date the interest rate on U.S. Treasury bonds is lower than Tom expected. Tom will have:

• A) lost money on his long position.
• B) gained money on his long position.
• C) lost money on his short position.
• D) gained money on his short position.

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Definitions:

P-Waves

Primary waves, which are compressional waves that travel through the Earth's interior during seismic events.

Velocity

A physical vector quantity that denotes the rate of change of position of an object, with both magnitude and direction.

Density

The mass per unit volume of a substance, used as a measure of its compactness.

Seismic Tomography

A technique using the arrival times of seismic waves to identify materials with different physical properties within the Earth.