If You Sell Twenty-Five $100,000 Futures Contracts to Hedge Holdings

question 63

Multiple Choice

If you sell twenty-five $100,000 futures contracts to hedge holdings of a Treasury security,the value of the Treasury securities you are holding is

• A)$250,000.
• B)$1,000,000.
• C)$2,500,000.
• D)$5,000,000.

---

Definitions:

Foliation

A feature of metamorphic rocks where mineral grains are arranged in planes or bands, giving the rock a layered appearance.

Joints

Natural fractures or separations in rocks along which there has been no significant movement parallel to the surfaces of the fracture.

Anticline

A type of fold that is arch-like and has its oldest rocks at its core, formed by the compression and bending of Earth's crust.

Columnar Joints

Vertical, pillar-like structures that form in basalt and other rocks due to cooling and contraction.