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:

Lead Time Reduction

A strategy aimed at reducing the time taken from initiating a process to its completion, often used to enhance operational efficiency.

Cost-Saving

A reduction in expenses that increases net income and cash flow, which can be achieved through various methods like improving efficiency or negotiating better terms with suppliers.

Processed Item

An item that has undergone a series of actions or steps to bring it to a specified state, often referring to manufactured or packaged goods.

Lead Time

The elapsed time between starting a unit of product into the beginning of a process and its completion. Also called throughput time.