To Exploit an Expected Decrease in Interest Rates, an Investor

question 64

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

---

Definitions:

Opportunity Cost

The value of the best alternative that must be sacrificed in order to pursue a certain action.

Motorcycles

Two-wheeled vehicles powered by an engine, often used for both everyday transport and recreational activities.

SUVs

Sport Utility Vehicles; a category of motor vehicles that combine elements of road-going passenger cars with features from off-road vehicles, such as raised ground clearance and four-wheel drive.

Comparative Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower opportunity cost than competitors.