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

question 35

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 steepen,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

Evaluate the methods and credibility of persuasive messages and their sources.

Understand how rapid assessments based on minimal information can lead to quick inferences about individuals.

Understand the mechanisms through which prejudicial attitudes are developed in individuals.

Knowledge of tools and tests used to measure implicit attitudes and prejudice.

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Definitions:

Multistage DDM

A version of the Dividend Discount Model that accounts for different growth rates over various stages in a company's lifecycle.

Required Return

The return a investor needs on an investment to compensate for the risk of the investment.

Dividend

A portion of a company's earnings distributed to shareholders, typically in the form of cash or additional stock.

Expected Decline Rate

The anticipated rate at which a value, such as stock price or economic indicator, is projected to decrease over a specified period.