22-129 If Treasury Note Futures Prices Fall to 98?17 in One

question 101

Multiple Choice

22-129 If Treasury note futures prices fall to 98?17 in one year,what is the profit/loss on the futures position if the bank fully hedges interest rate risk exposure? Assume that the duration of the Canadian bonds is the same as the duration of Treasury note futures.

• A)Buy 13 Treasury bond futures for an end-of-year futures profit of $312.50.
• B)Sell 13 Treasury bond futures for an end-of-year futures profit of $312.50.
• C)Sell 13 Treasury bond futures for an end-of-year futures profit of $4,062.50.
• D)Buy 13 Treasury bond futures for an end-of-year futures profit of $4,062.50.
• E)Sell 1 Treasury bond futures for an end-of-year futures profit of $98,843.75

Acknowledge the importance of budgeting in achieving organizational goals, controlling operations, and providing information for decision-making.

Understand the relationship between management accounting information and organizational strategy.

Recognize the importance of ethical behavior and continuous improvement for accountants.

Identify the major professional organizations for management accountants in Australia.

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Definitions:

Pectoralis Major

A large chest muscle that plays a key role in moving the shoulder joint.

Latissimus Dorsi

A large, flat muscle on the back that helps in movement of the shoulder and arm, including extension and rotation.

Teres Major

An upper limb muscle that helps rotate and draw the arm towards the body.

Coracobrachialis

A muscle in the shoulder that assists in flexing and adducting the arm.