Business and Personal Finance Dictionary

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 

• FINANCIAL FUTURE
  
  When the underlying investment of a futures contract is a financial product, such as certificates of deposit (CDs), US Treasurys, US agency bonds, or overseas currencies, the contract is described as a financial future. Generally, the contract changes in value in response to changes in the interest rate. Increases in the rate produce falling contract prices, while drops in the rate produce rising contract prices. In most cases, the hedgers who use these contracts are banks and other financial institutions who want to protect their portfolios against sudden changes in value triggered by changing interest rates.
  
  Back