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.

---

Definitions:

Attractiveness

A subjective quality that makes something appealing or desirable to individuals.

Coercive Appeal

A strategy in advertising or persuasion that uses threats or fear of negative consequences to influence behavior or decisions.

Flattery Appeal

A persuasive technique in marketing that uses compliments or flattery to influence the behavior or opinions of the target audience.

Fear Appeal

A persuasive message that attempts to arouse fear in order to divert behavior through the threat of harm or danger.