Exhibit 21 -Refer to Exhibit 21

question 67

Multiple Choice

Exhibit 21.1
Use the Information Below for the Following Problem(S)
In late January 2004, The Union Cosmos Company is considering the sale of $100 million in 10-year debentures that will probably be rated AAA like the firm's other bond issues. The firm is anxious to proceed at today's rate of 10.5 percent. As treasurer, you know that it will take until sometime in April to get the issue registered and sold. Therefore, you suggest that the firm hedge the pending issue using Treasury bond futures contracts each representing $100,000.
$$\begin{array} { l c c } & \text { Casel } & \text { Case2 } \\ \text { Current Value - January 2004 } & & \\\text { Bond Rate } & 10.5 \% & 10.5 \% \\\text { June 2004 Treasury Bonds } & 78.875 & 78.875 \\\text { Estimated Values - Aprì 2004 } & & \\\quad \text { Bond Rate } & 11.0 \% & 10.0 \% \\\text { June 2004 Trea5ury Bonds } & 75.93 & 81.84\end{array}$$
-Refer to Exhibit 21.1.Explain how you would go about hedging the bond issue?

• A) Sell 1,000 contracts
• B) Buy 1,000 contracts
• C) Sell 100 contracts
• D) Sell 10,000 contracts
• E) None of the above

---

Definitions:

Bookstore Owner

An individual or entity that owns and operates a retail establishment selling books.

Direct Question

A straightforward inquiry that seeks a specific piece of information or a direct response from the person being asked.

Need-Payoff Question

A question asked by a salesperson to help a potential customer realize the value and benefits of a product, leading to their own conclusion that the product can satisfy their needs.

SPIN Approach

A sales technique that involves asking Situation, Problem, Implication, and Need-payoff questions to understand customer needs and offer solutions.