If Using a Treasury Bill Futures Contract to Offset a Commercial

question 1

Multiple Choice

If using a Treasury bill futures contract to offset a commercial paper position,the financial manager should ensure that

• A)the two vehicles are interchangeable for purposes of delivery at the contract's expiration
• B)the movement in Treasury bill rates and commercial paper rates are closely correlated
• C)the maturities of the futures contract and commercial paper are different
• D)none of the above

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Definitions:

Holistic Critical Thinking

An approach to critical thinking that considers the whole context, including varied perspectives and interrelated factors.

Scoring Rubric

A guide used for assessing the quality of tasks or performances, detailing the criteria and standards for different levels of achievement.

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Having great physical power, strength, or force; also used metaphorically to describe resilience or potency in non-physical contexts.

Critical Thinking

The active process of analyzing, synthesizing, and evaluating information to reach an informed conclusion.