Suppose the December CBOT Treasury Bond Futures Contract Has a Quoted

question 8

Multiple Choice

Suppose the December CBOT Treasury bond futures contract has a quoted price of 80'07.If annual interest rates go up by 1.00 percentage point, what is the gain or loss on the futures contract? (Assume a $1,000 par value, and round to the nearest whole dollar.)

• A) −$78.00
• B) −$82.00
• C) −$86.00
• D) −$90.00
• E) −$95.00

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Definitions:

Negative Feedback

A regulatory mechanism in which a stimulus causes an opposite output in order to maintain an ideal level of whatever is being regulated.

Type-II Survivorship

A survivorship curve in which individuals are equally likely to die at any age, representing a relatively constant mortality rate throughout the organism's life.

Exponential Growth

Growth that occurs at a rate that becomes ever more rapid in proportion to the growing total number or size.

J Shape

Often refers to a type of curve, graph, or object shape that resembles the letter "J"; specific context can greatly influence its meaning.