Interest rate Futures.

CFA Level II
#1

Please kindly help me understand the answer of the question 31, Practice exam 1 Schweser , why interest rate falls, the long of eurobor future gains ( I think the long will loss)?

#2

bump!

#3

a long position in the future is equivalent to lending at a fixed rate. if rates fall, then i can lend at a higher rate and have a gain as a result

#4

hm… would appreciate some more help

#5

http://en.wikipedia.org/wiki/Eurodollar

“Eurodollar futures contract as synthetic loan”