On January 1, the Listed Spot and Futures Prices of a Treasury

question 73

Multiple Choice

On January 1, the listed spot and futures prices of a Treasury bond were 93.8 and 93.13.You purchased $100,000 par value Treasury bonds and sold one Treasury bond futures contract.One month later, the listed spot price and futures prices were 94 and 94.09, respectively.If you were to liquidate your position, your profits would be a

• A)$125 loss.
• B)$125 profit.
• C)$12.50 loss.
• D)$1,250 loss.

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Definitions:

Simple Interest

Interest figured only on the principal balance, or on the portion of the principal balance that is still due.

Closing Balance

The amount of money in an account at the end of a period, after all transactions have been accounted for.

Bank Account

A financial account maintained by a bank or another financial institution in which the deposits, withdrawals, and balances of a customer are recorded.

Maturity Value

The sum owed to an investor at the conclusion of a fixed-duration investment, encompassing both the original amount invested and the accrued interest.