You Hold a Forward Contract to Take Delivery of U

question 41

Multiple Choice

You hold a forward contract to take delivery of U.S. 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

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