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Answer options: 1. Risen or fallen 2. Increased or reduced 3. Short or long 4. Daily or weekly You sell a bond futures contract and,

Answer options:

1. Risen or fallen

2. Increased or reduced

3. Short or long

4. Daily or weekly

image text in transcribed

You sell a bond futures contract and, one day later, the clearinghouse informs you that it had credited funds to your margin account. What happened to interest rates over that day? Interest rates have risen so as the holder of the short marks to market on a daily account. This increased the price of the bonds and position you have gained. As the clearinghouse basis, this gain was posted to your margin

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