A Bond Trader Who Buys a Treasury Bond Futures Contract

question 56

True/False

A bond trader who buys a Treasury bond futures contract at a yield of 6.25% per annum and then sells it at 5.5% per annum makes a profit on the contract.

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within a year's time, including cash, inventory, and receivables.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle.

Ratios

A quantitative relationship between two numbers, showing how many times one value contains or is contained within the other.