USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 69

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
A three-month T-bond futures contract (maturity 20 years, coupon 6 percent, face $100,000) currently trades at $98,781.25 (implied yield 6.11 percent) . A three-month T-note futures contract (maturity 10 years, coupon 6 percent, face $100,000) currently trades at $101,468.80 (implied yield 5.80%) . Assume semiannual compounding.
-Refer to Exhibit 15.4. If you expected the yield curve to flatten, the appropriate note against bond futures spread strategy would be

• A) go long the T-bond and short the T-note.
• B) go short the T-bond and long the T-note.
• C) go long the T-bond and long the T-note.
• D) go short the T-bond and short the T-note.
• E) None of these are correct.

---

Definitions:

Problem-solving Team

A group of individuals working together to find a solution to a specific issue or challenge.

Drive Train Assembly

The series of components in a vehicle that transfer power from the transmission to the wheels, enabling movement.

IDEO

A global design and consulting firm known for pioneering methods in innovation and human-centered design.

Hybrid Team

Teams composed of members who work together through a combination of in-office and remote environments, leveraging diverse methods of communication and collaboration.