Reading 23 Question 12 - Interest Rate Futures Vs Bond Futures

[leopoldstoch]

Hi Guys,
Any clarification here would be appreciated.
The answer to Reading 23, Question 12, says that “To extend duration, Ibahn would need to purchase interest rate futures contracts”
Do they actually mean bond futures contracts?
I thought:
on interest rate futures -> rates up = price up
on bond futures -> rates down = price up

Thanks.

 

[Swiftly]

I think you’re getting interest rate futures and interest rate calls muddled up:

• Interest rate futures are based on underlying interest-bearing instruments. Therefore the prices are negatively correlated with interest rates.
• Interest rate calls are based on underlying interest rates and are positively correlated with interest rates.

 

[Galli]

i think this question Ibhan expects interest rates to fall. He wants exposure to falling interest rates, he will go long bond futures to capture the increase in price.
The text seems to get itself mixed up between interet rate futures and bond futures, im not even sure they formally cover the interest rate derivative market outside of calls/puts.