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.

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