Exhibit 20.2 Use the Information Below for the Following Problem(S)

question 66

Multiple Choice

Exhibit 20.2
Use the Information Below for the Following Problem(S)
A futures contract on Treasury bond futures with a December expiration date currently trade at 103:06. The face value of a Treasury bond futures contract is $100,000. Your broker requires an initial margin of 10%.
-Refer to Exhibit 20.2.If the futures contract is quoted at 105:08 at expiration calculate the percentage return.

• A) 1.99%
• B) 19.99%
• C) 20.62%
• D) 25.37%
• E) -13.65%

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Definitions:

Monopolistic Competition

A market structure where many companies sell products that are similar but not identical, leading to competition based on quality, price, and brand.

Perfect Competition

A market structure characterized by many sellers and buyers, homogeneous products, and no single entity able to influence prices.

Barriers to Entry

Economic, procedural, or regulatory obstacles that prevent new competitors from easily entering an industry or area of business.

Breaking Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain for a business.