Exhibit 21 $$\begin{array} { c c c } & \text { T-Eill } & \text { Eurqdollar } \\\text { September } & 93.25 & 92.35\end{array}$$

question 95

Multiple Choice

Exhibit 21.6
Use the Information Below for the Following Problem(S)
Assume that you observe the following prices in the T-Bill and Eurodollar futures markets
$$\begin{array} { c c c } & \text { T-Eill } & \text { Eurqdollar } \\\text { September } & 93.25 & 92.35\end{array}$$
-Refer to Exhibit 21.6.If you expected the TED spread to widen over the next month then an appropriate strategy would be to

• A) Go long T-Bill futures and long Eurodollar futures.
• B) Go short T-Bill futures and short Eurodollar futures.
• C) Go long T-Bill futures and short Eurodollar futures.
• D) Go short T-Bill futures and long Eurodollar futures.
• E) None of the above.

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Definitions:

Break-even Point

The sales level at which a business generates neither profit nor loss, covering all fixed and variable costs.

Unit Sales

The quantity of products sold, not considering the price at which they were sold.

Contribution Margin

Contribution Margin is the amount of revenue remaining after deducting variable costs, which can then be used to cover fixed costs or generate profit.

Income Statement

A financial statement that shows a company's revenues and expenses over a specified period, culminating in the net income or loss.