Based on the Price Sensitivity Hedge Ratio Approach,what Is the Optimal

question 58

Multiple Choice

Based on the price sensitivity hedge ratio approach,what is the optimal number of futures contracts to deploy,given the following information.The yield beta is 0.65,the present value of a basis point change for the underlying bond portfolio is $33,000,and the present value of a basis point change for the bond futures contract is $325.(Select the closest answer. )

• A)long 100 futures contracts
• B)long 55 futures contracts
• C)short 66 futures contracts
• D)short 22 futures contracts
• E)short 11 futures contracts

Comprehend the concept of material participation and its impact on rental activities and tax treatment.

Distinguish between capital improvements and repairs for rental properties.

Learn the method for reporting rental income and related expenses, including the allocation method for mixed-use properties.

Recognize the conditions under which rental losses can be reported against other income.

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Definitions:

Interest Rate

The fraction of a loan amount charged as interest to the borrower, often shown as an annual percent of the outstanding loan.

New Capital

Additional funds or assets put into a business by the owners or investors intended for the expansion or improvement of the enterprise.

Profits

The financial gain realized when the revenue from an economic activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Industry

A sector of the economy characterized by the production of goods or provision of services within a certain field.