Exhibit 21 $$\begin{array} { c c c } & \text { T-Eill } & \text { Euradollar } \\ \text { September } & 95.24 & 94.6\end{array}$$

question 38

Multiple Choice

Exhibit 21.7
Use the Information Below for the Following Problem(S)
Assume that you observe the following prices in the T-Bill and Eurodollar futures markets
$$\begin{array} { c c c } & \text { T-Eill } & \text { Euradollar } \\ \text { September } & 95.24 & 94.6\end{array}$$
-Refer to Exhibit 21.7.If you expected the TED spread to narrow 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:

Down Payment

An initial, upfront partial payment made for the purchase of expensive goods or services, often in the context of real estate or automobiles.

Option

A separate promise to keep an offer open for a period of time.

Verbal Offer

An offer made orally, rather than in written form, in the context of negotiations or agreements.

Binding Contract

An agreement between two or more parties that is legally enforceable and subject to legal remedies or damages in case of breach.