Several transactions are listed below, with the accounting equation stated to the right side of each. Use the following identification codes to indicate the effects of each transaction on the accounting equation. Write your answers in the space provided under the accounting equation. You need an identification code for each element of the accounting equation. An example is given before the first transaction.
Definitions:
Shorting Index Futures
A strategy involving the sale of index futures contracts to profit from an anticipated decline in the value of the underlying index.
Longing Steel Futures
The act of buying futures contracts in steel, betting that the price of steel will increase over the term of the contract.
Treasury Bond
Long-term, fixed-interest U.S. government debt securities with maturities over ten years, considered low-risk investments.
Futures Contract
A contractual agreement regulated by law, specifying the sale or purchase of an item at a fixed price, to be executed at a later date.
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