D. Financial Futures Relationship with Interest Rates

• Example: December T-Bonds Futures price is 67-17. This translates to a value of 67 17/32% or .6753125 or an underlying value of $67,531.25.

  • If interest rates go up then the value of the futures contract will decrease.
  • If interest rates go down then the value of the futures contract will increase.

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