Question: Dudley Savings Bank wishes to take a position in Treasury

Dudley Savings Bank wishes to take a position in Treasury bond futures contracts, which currently have a quote of 105-100. Dudley Savings thinks interest rates will go down over the period of investment.
a. Should the bank go long or short on the futures contracts?
b. Calculate the net profit to Dudley Savings Bank if the price of the futures contracts increases to 105-220.
c. Calculate the net profit to Dudley Savings Bank if the price of the futures contracts decreases to 104-280.


View Solution:


Sale on SolutionInn
Sales3
Views376
Comments
  • CreatedJanuary 27, 2015
  • Files Included
Post your question
5000