Question: 4. Tree Row Bank wishes to take a position in Treasury bond futures contracts, which currently have a quote of 9504. Tree Row thinks interest

4. Tree Row Bank wishes to take a position in Treasury bond futures contracts, which currently have a quote of 9504. Tree Row thinks interest rates will go up over the period of investment. Assume the par value is $100.

a.Should the bank go long or short on the futures contracts?

b.Calculate the net profit to Tree Row Bank if the price of the futures contracts decreases to 9428.

c.Calculate the net profit to Tree Row Bank if the price of the futures contracts increases to 9521

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