Conyers Bank Holds Treasury Bonds with a Book Value of $30

question 213

Multiple Choice

Conyers Bank holds Treasury bonds with a book value of $30 million. However, the Treasury bonds currently are worth $28,387,500. The portfolio manager for Conyers Bank wishes to sell the entire issue of Treasury bonds at a current price of 87-05/32^nds. What will be the gain or loss on the cash position since the futures contract was placed? (That is, since the bonds were valued at $28,387,500.)

• A)Loss of $3,834,375.
• B)Loss of $3,853,125.
• C)Gain of $2,240,625.
• D)Gain of $3,853,125.
• E)Loss of $2,240,625.

---

Definitions:

New Products

Goods or services that have been recently developed or introduced to the market.

Market Development

A strategic approach to grow a business by identifying and entering new markets for existing products.

Military Base

A facility directly owned and operated by or for the military or one of its branches that shelters military equipment and personnel, and facilitates training and operations.

Growth Strategy

A plan of action designed to increase the size and scope of a business, including expanding product lines, markets, or operational capacity.