The Financial Controller of Nointerest Ltd Has Planned That the Company

question 32

Multiple Choice

The financial controller of Nointerest Ltd has planned that the company borrow using a 90-day bank bill facility with face value of $500 000 in four weeks.Interest rates on 90-day bank bills are currently 12% p.a.As a protection against possible interest rate increases,she has entered into a futures contract by selling one bank bill futures contract at a price of $88.50.After the four-week period,she reverses the futures position at $86.50 and issues a bank bill at a rate of 14% p.a.Calculate the gain/loss made on the futures contract.

• A)$2321 gain.
• B)$2111 gain.
• C)$7902 loss.
• D)$3580 loss.

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Definitions:

Transcription

The process by which the genetic information encoded in DNA is copied into messenger RNA, leading to protein synthesis.

tRNA Triplet

A sequence of three nucleotides in transfer RNA that corresponds to a complementary codon in messenger RNA during protein synthesis.

mRNA

Messenger RNA, a type of RNA that conveys genetic information from DNA to the ribosome, where proteins are synthesized.

Codon

A sequence of three nucleotides in DNA or RNA that specifies the addition of a specific amino acid during protein synthesis.