If You Sell Twenty-Five $100,000 Futures Contracts to Hedge Holdings

question 63

Multiple Choice

If you sell twenty-five $100,000 futures contracts to hedge holdings of a Treasury security,the value of the Treasury securities you are holding is

• A)$250,000.
• B)$1,000,000.
• C)$2,500,000.
• D)$5,000,000.

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Definitions:

FIFO File

A method of handling data where the first piece of data entered is the first one to be processed or removed, similar to a queue.

False-to-true Transition

A change in state or condition from false (off or 0) to true (on or 1), often used in digital electronics or programming logic.

Shift Register

A digital memory circuit used to store and shift bits, often used in serial communication and for temporary data storage.

Sequencer Process

A control process that operates in a step-by-step manner, precisely controlling the sequence of operations or tasks, commonly used in automated systems.