3. Interest rate futures contracts 1. 2. 3. STEP: 2 of 3 eurodollar CD Suppose that Eleanor forecasts that interest rates will decrease ovl Treasury bond Treasury bonds that have settlement dates for three months from and the market value of the contract is 95-00, then Eleanor will ha Treasury bill h, so she calls a broker and purchases50 futures contracts on contracts on Treasury bonds represent $100,000 of par value, $93,000 in the futures contracts. Treasury note Suppose the market value of the contracts after one month is 93- Jecides she wants to offset her current position. If she wants to offset her position, Eleanor would purchase Treasury note futures contracts, resulting in a total loss of $2,000. (Hint: Assume that there were no transaction costs and that the values you enter are all positive numbers.) Grade Step 2 TOTAL SCORE: 1/4 (to complete this step and unlock the next step) Grade It Now Save & Continue 4. Stock index futures contracts 1. 2. 3. STEP: 2 of 3 Suppose that Oracle Insurance Company forecasts that stock market prices are going to increase considerably over the next three months and that they want to purchase200S&P Midcap 400 index futures contracts that have settlements that are six months out. If the index has a value of 2,000, and the value of a contract is 100 times the index's value, then Oracle Insurance Company will have invested $ in the futures contracts. Suppose after three months, the S&P Midcap 400 index is 2,100. If Oracle Insurance Company wants to offset their position, they would futures contracts, resulting in a total of $ Assume that there were no transaction costs and that the values you enter are all positive numbers.) (Hint: TOTAL SCORE: 114 Grade Step 2 (to complete this step and unlock the next step) 3. Interest rate futures contracts 1. 2. 3. STEP: 2 of 3 eurodollar CD Suppose that Eleanor forecasts that interest rates will decrease ovl Treasury bond Treasury bonds that have settlement dates for three months from and the market value of the contract is 95-00, then Eleanor will ha Treasury bill h, so she calls a broker and purchases50 futures contracts on contracts on Treasury bonds represent $100,000 of par value, $93,000 in the futures contracts. Treasury note Suppose the market value of the contracts after one month is 93- Jecides she wants to offset her current position. If she wants to offset her position, Eleanor would purchase Treasury note futures contracts, resulting in a total loss of $2,000. (Hint: Assume that there were no transaction costs and that the values you enter are all positive numbers.) Grade Step 2 TOTAL SCORE: 1/4 (to complete this step and unlock the next step) Grade It Now Save & Continue 4. Stock index futures contracts 1. 2. 3. STEP: 2 of 3 Suppose that Oracle Insurance Company forecasts that stock market prices are going to increase considerably over the next three months and that they want to purchase200S&P Midcap 400 index futures contracts that have settlements that are six months out. If the index has a value of 2,000, and the value of a contract is 100 times the index's value, then Oracle Insurance Company will have invested $ in the futures contracts. Suppose after three months, the S&P Midcap 400 index is 2,100. If Oracle Insurance Company wants to offset their position, they would futures contracts, resulting in a total of $ Assume that there were no transaction costs and that the values you enter are all positive numbers.) (Hint: TOTAL SCORE: 114 Grade Step 2 (to complete this step and unlock the next step)
