A _____ Position in T-Bond Futures Should Be Used to Hedge

question 29

Multiple Choice

A _____ position in T-bond futures should be used to hedge falling interest rates and a _____ position in T-bond futures should be used to hedge falling bond prices.

• A)long; short
• B)long; long
• C)short; long
• D)short; short

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Definitions:

Variable Selling

Costs that vary directly with the volume of sales, such as commissions and shipping charges.

Administrative Expense

Administrative expense includes overhead costs not directly tied to a specific project or production process, such as salaries of executive staff, office supplies, and utilities.

Direct Labor-Hours

The amount of time spent by workers directly involved in manufacturing a product or delivering a service.

Raw Materials

The basic substances in their natural, modified, or semi-processed states used as inputs for manufacturing processes.