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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › June 2015 MCQ
“Borrowers hedging against an interest rate increase will buy interest rate futures now and sell them at a future date”
Why is this incorrect?
You need to watch my free lectures on interest rate futures where this is fully explained.
As interest rates increase, futures prices will fall. So to make a gain when interest rates increase you sell futures now and buy back at a later date.
I see. That’s clear now.
Thanks
You are welcome 🙂