Question: Qatar savings bank wishes to take a position in treasury bond futures contracts, which currently have a quote of 105-150. Qatar savings thinks interest rates

Qatar savings bank wishes to take a position in treasury bond futures contracts, which currently have a quote of 105-150. Qatar savings thinks interest rates will go down over the period of investment.

1. Calculate the net profit/loss to Qatar savings bank for a $100,000 if the price of the future contracts decrease to 104-100.

2. Calculate the net profit/loss to Qatar savings bank for a $100,000 if the price of the future contracts increase to 105-260.

3. Should the bank go long or short on the future contracts?

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