You Hold a Forward Contract to Take Delivery of Treasury

question 37

Multiple Choice

You hold a forward contract to take delivery of Treasury bonds in 9 months.If the entire term structure of interest rates shifts down over the 9-month period,the value of the forward contract will have _____ on the date of delivery.

• A)risen
• B)fallen
• C)not changed
• D)either risen or fallen,depending on the maturity of the T-bond
• E)collapsed