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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Definitions:

Participant Observation

Research method in which the researcher participates in an activity to observe and better understand the people involved and their perspectives.

Terminology

The set of specialized words or expressions used in a particular field or profession.

Industry Standards

are agreed-upon norms and specifications within an industry that ensure products, services, and practices meet certain quality and safety criteria.

Quantitative Research

A research method focusing on obtaining data through objective measurements and statistical, mathematical, or numerical analysis of data collected through polls, questionnaires, and surveys.