Suppose a Eurodollar Time Deposit Futures Contract Whose Underlying's Duration

question 93

Multiple Choice

Suppose a Eurodollar time deposit futures contract whose underlying's duration is 0.5 years and has a current market price of $950,000.Market interest rates are 8.5 percent and are expected to fall to 7.5 percent.What is the expected change in this futures contract's market price as a result of this change in interest rates?

• A)$4,378
• B)-$4,378
• C)$30,645
• D)-$30,645
• E)None of the options are correct

Discuss the accuracy and implications of the statement that bankruptcy is a way to avoid paying debts.

Explain the status of a bankrupt individual post-discharge.

Evaluate the protection of creditor's interests during the bankruptcy and insolvency process.

Discuss alternatives to bankruptcy and their benefits.

---

Definitions:

Face Value

The nominal or dollar value printed on a bond, note, or other financial instrument, indicating its worth at maturity.

Treasury Bond

A long-term government bond issued by the U.S. Treasury with a maturity period typically ranging from 20 to 30 years.

Face Value

The nominal or original value written on a financial instrument, such as a bond or stock certificate, not necessarily reflecting its market value.

Semi-Annual Coupon Bonds

Bonds that pay interest to holders twice a year, typically known for providing a steady income stream to investors.