If the Portfolio Manager Put on the Hedge When T-Bond

question 81

Multiple Choice

If the portfolio manager put on the hedge when T-bond futures were quoted at 89-00/32^nds, what is the profit/loss on the futures position if the settlement price is 81-27/32^nds?

• A)Profit of $2,146,875.
• B)Loss of $2,146,875.
• C)Profit of $1,270,000.
• D)Loss of $1,270,000.
• E)Loss of $812,700.

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Definitions:

Piggyback

A strategy or method where an individual, product, or company leverages the efforts or success of another for mutual benefit or to achieve a specific objective.

Nominal Group Technique

A structured method for group brainstorming that encourages contributions from everyone and is used to generate and prioritize ideas.

Interacting Groups

Groups of individuals who come together to achieve common goals and are characterized by regular communication and interdependence.

Trust

The confidence or belief in the integrity, reliability, and fairness of a person or system.