If We Buy a $100 90- Day Bank Bill Futures

question 26

Multiple Choice

If we buy a $100 90- day bank bill futures contract at $95.60, which of the following is true?

• A) We pay $98.23 on settlement day.
• B) We receive a bank bill on settlement day worth $95.60.
• C) The bill will earn us 4.40% p.a. over 90 days starting from the settlement date.
• D) There is a cash settlement involving us in paying $4.40.

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Definitions:

Conditioned Stimulus

An initially neutral signal that, once linked with an unconditioned stimulus, ultimately elicits a conditioned response.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without prior learning.

Response of Interest

The specific reaction or outcome measured in a research study to evaluate the effects of various conditions or treatments.

Conditioning

The process of learning through association, where a response becomes more frequent or predictable in a given environment due to reinforcement.