You Are Long a Forward on the S&P 500 Index

question 8

Multiple Choice

You are long a forward on the S&P 500 index that you entered into two months ago and has a month left to maturity. If the one-month rate of interest increases, then, ceteris paribus,

• A) The value of your forward contract increases.
• B) The value of your forward contract decreases.
• C) The value of your forward contract is unaffected since the delivery price on your contract was already locked in two months ago.
• D) The value of your forward contract is unaffected since the level of the index does not change.

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Issues, decisions, and activities related to the management of money and financial instruments.

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A qualification awarded to accountants who pass the Uniform CPA Exam and meet additional state requirements, authorizing them to practice as Certified Public Accountants.

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