A Speculator Who Believes Strongly That Interest Rates Will Fall

question 94

Multiple Choice

A speculator who believes strongly that interest rates will fall would be likely to

• A)buy futures contracts on Treasury bills.
• B)sell futures contracts on Treasury bills.
• C)sell Treasury bonds in the spot market.
• D)decrease now the amount of money which he lends.

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Definitions:

Electrode

A conductor through which electricity enters or leaves an object, substance, or region, commonly used in batteries and electrolysis.

Voltage

The electrical potential difference between two points in a circuit, measured in volts.

Anode

The positively charged electrode by which the electrons leave a device.

Cathode

The electrode from which electrons exit a device or where positive ions enter.