Exhibit 21.4 Use the Information Below for the Following Problem(S)

question 21

Multiple Choice

Exhibit 21.4
Use the Information Below for the Following Problem(S)
A 3-month T-bond futures contract (maturity 20 years, coupon 6%, face $100,000) currently trades at $98,781.25 (implied yield 6.11%) . A 3-month T-note futures contract (maturity 10 years, coupon 6%, face $100,000) currently trades at $101,468.80 (implied yield 5.80%) . Assume semiannual compounding.
-Refer to Exhibit 21.4.If you expected the yield curve to flatten,the appropriate NOB futures spread strategy would be

• A) Go long the T-bond and short the T-note
• B) Go short the T-bond and long the T-note
• C) Go long the T-bond and long the T-note
• D) Go short the T-bond and short the T-note
• E) None of the above

---

Definitions:

Autoimmune Diseases

Conditions where the immune system mistakenly attacks the body's own tissues.

Lactose-Free

Describes food or products that do not contain lactose, a sugar found in milk and dairy products, suitable for individuals with lactose intolerance.

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow that categorizes human needs into five levels, from basic (physiological) to higher-order (self-actualization) needs.

Aesthetic Needs

The human desire for beauty and pleasing experiences in one’s surroundings, contributing to mental and emotional well-being.