It is May. A corporate comptroller expects to have approximately $ 5 0 0 , 0 0
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It is May. A corporate comptroller expects to have approximately $ cash available in a few months and intends to invest the money in Treasury bonds. The current price of the issue that the comptroller wants is 6 December Tbond futures are The comptroller fears that longterm interest rates will fall in the interim, so she hedges by going long December Tbond futures at In December the comptroller receives the money, buys cash bonds at and sells the December Tbond hedge at Ignoring transaction costs, what was the effective price paid for the cash bonds?
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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