Exhibit 21.4 USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 31

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. Suppose the yield curve changed so the that the new yield on the T-bond contract rose to 6.5% and the new yield on the T-note contract fell to 5.5%. Calculate the profit on the NOB futures spread. (Assume coupons are paid semiannually)

• A)-$5850.92
• B)-$6,671.42
• C)$6,671.42
• D)$5850.92
• E)None of the above

Differentiate between an offer and an invitation to negotiate.

Understand the impact of the offeror’s incapacity or death on the offer.

Grasp the concept of mirror image rule in contract acceptance.

Realize how auctions and advertisements differ from formal offers.

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Definitions:

Behavioral Genetics

The study of how genetic and environmental factors affect behavioral traits.

Heredity Component

The genetic aspect of traits and characteristics passed down from parents to offspring, influencing various biological and physical features.

Environmental Influences

Factors and conditions in the external environment that affect individual development, behavior, and lifestyle choices.

Height

A measurement of how tall an individual or structure is, often determined in units such as feet, inches, or meters.