Exhibit 20.2 Use the Information Below for the Following Problem(S)

question 38

Multiple Choice

Exhibit 20.2
Use the Information Below for the Following Problem(S)
A futures contract on Treasury bond futures with a December expiration date currently trade at 103:06. The face value of a Treasury bond futures contract is $100,000. Your broker requires an initial margin of 10%.
-Refer to Exhibit 20.2.Calculate the initial margin deposit.

• A) $10,000
• B) $10,360.50
• C) $10,318.75
• D) $10,230.63
• E) $10,429.35

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Definitions:

Consumption

The employment of goods and services within home environments.

Income

Monetary payment received for work or through investments.

Interest Rate

The fraction of a loan that incurs interest costs for the borrower, usually described as an annual percentage rate.

Utility Function

A mathematical representation of how a consumer's satisfaction or preference for goods and services is dependent on their consumption levels.