Dudley Savings Bank wishes to take a position in Treasury bond futures contracts, which currently have a
Question:
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. (LG 10-2)
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.
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Related Book For 
Financial Markets And Institutions
ISBN: 9781259919718
7th Edition
Authors: Anthony Saunders, Marcia Cornett
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