On January 1, the Listed Spot and Futures Prices of a Treasury

question 22

Multiple Choice

On January 1, the listed spot and futures prices of a Treasury bond were 95.4 and 95.6.You sold $100,000 par value Treasury bonds and purchased one Treasury bond futures contract.One month later, the listed spot price and futures prices were 95 and 94.4, respectively.If you were to liquidate your position, your profits would be

• A)$125 loss.
• B)$125 profit.
• C)$1,060.50 loss.
• D)$1,062.50 profit.
• E)None of the options

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Definitions:

Regular Rate

Typically refers to the normal hourly rate paid for standard work hours to an employee, not including overtime or bonuses.

Rate of Pay

The amount of money a person is paid per unit of time, such as an hourly wage or annual salary.

Hourly Pay Rate

The compensation given for each hour of labor.

Average Rate

A value representing the middle point of a rate over a specified period, often calculated by summing rates and dividing by the number of rates.