D. Financial Futures Relationship with Interest Rates

1. Long Position--involves the purchase of a futures contract and the expectation that interest rates will fall. When the futures contract is purchased the underlying securities will increase in value when interest rates fall. Therefore, the value of the futures contract will increase.

1. Long Position--involves the purchase of a futures contract and the expectation that interest rates will fall. When the futures contract is purchased the underlying securities will increase in value when interest rates fall. Therefore, the value of the futures contract will increase.