Sue Sells a Futures Contract for U

question 36

Multiple Choice

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

• A)Lost money on her short position.
• B)Gained money on her long position.
• C)Gained money on her short position.
• D)Lost money on her long position.

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Definitions:

Shareholders

Individuals or institutions that own share(s) in a corporation, thereby having a claim on its profits and assets.

Board Members

Board members are individuals elected to represent shareholders and oversee the management and major decisions of a corporation.

Leveraged Buyout

A financial transaction in which a company is bought using a significant amount of borrowed money to meet the cost of acquisition.

Debt

An amount of money borrowed by one party from another, typically used by companies and governments to finance their operations.