Question
Assume today is mid-October 2010. You expect to borrow $1mil by issuing Bank Accepted Bill (BAB) for 90 days in mid-December 2010 (i.e. the borrowing
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Assume today is mid-October 2010. You expect to borrow $1mil by issuing Bank Accepted Bill (BAB) for 90 days in mid-December 2010 (i.e. the borrowing period is between mid-December 2010 and mid-March 2011). Fearing that the BAB yield will move against you between now and mid-December 2010, you intend to lock in the borrowing rate by using the BAB futures. You will:
A. Short the BAB futures today
B. Short BAB today
C. Long the BAB futures today
D. Long BAB today
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ABC Finance Coloring Book Familys First Financial Literacy Book
Authors: Jason Conger
1st Edition
1955961026, 978-1955961028
