You Hold a Bond Portfolio Worth $10 Million and a Modified

question 24

Multiple Choice

You hold a bond portfolio worth $10 million and a modified duration of 8.5.What futures transaction would you do to raise the duration to 10 if the futures price is $93,000 and its implied modified duration is 9.25? Round up to the nearest whole contract.

• A)buy 109 contracts
• B)buy 17 contracts
• C)buy 669 contracts
• D)sell 100 contracts
• E)sell 669 contracts

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Definitions:

General Contractor

A principal contractor who is responsible for the oversight of a construction project, managing subcontractors, and providing materials and labor for the completion of the job.

Holdback

A portion of funds or payment deliberately kept back until certain conditions are met or work is completed satisfactorily.

Fraudulent Preferences

Financial transactions made by a debtor before bankruptcy that unfairly favor one creditor over others.

Bankruptcy and Insolvency Act

Legislation governing bankruptcy and insolvency proceedings to help individuals and companies unable to meet their financial obligations.