The Average Duration of the Loans Is 10 Years

question 159

Multiple Choice

The average duration of the loans is 10 years. The average duration of the deposits is 3 years. What is the number of T-bond futures contracts necessary to hedge the balance sheet if the duration of the deliverable bonds is 9 years and the current price of the futures contract is $96 per $100 face value?

• A)1,630 contracts.
• B)1,475 contracts.
• C)1,900 contracts.
• D)2,078 contracts.
• E)3,225 contracts.

---

Definitions:

Formal Social Control

Methods of social control that are implemented by official organizations to ensure conformity, including laws, police, and judicial systems.

Glaring

Typically refers to shining with a harsh, bright light, but in a social context, it can mean something that is very obvious or conspicuous, especially in terms of social issues or discrepancies.

Classical Criminology

An approach in criminological thought that emphasizes rationality and free will, suggesting that individuals choose to commit crimes after weighing the potential benefits and consequences.

Potential Penalties

Possible sanctions or consequences that one may face as a result of violating laws or rules.