USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 94

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Assume you are the Treasurer for the Johnson Pharmaceutical Company and in late July 2004, the company is considering the sale of $500 million in 20-year bonds that will most likely be rated the same as the firm's other debt issues. The firm would like to proceed at the current rate of 8.5%, but you know that it will probably take until November to bring the issue to market. Therefore, you suggest that the firm hedge the pending issue using Treasury bond futures contracts, which each represent $100,000.

-Refer to Exhibit 15.2. How you would go about hedging the bond issue?

• A) buy 5,000 contracts
• B) buy 50,000 contracts
• C) sell 5,000,000 contracts
• D) sell 5,000 contracts
• E) sell 500 contracts

---

Definitions:

Possible Causes

Factors or conditions that can bring about a particular phenomenon or outcome.

Motor Development

The gradual progression of muscle control, movement skills, and physical coordination in infants and children.

Middle Childhood

A developmental stage that typically encompasses the ages of 6-12 years, characterized by significant growth and development in social, cognitive, and emotional areas.

Sex Differences

Refers to the biological and physiological distinctions between males and females, often influencing physical, cognitive, and behavioral aspects.