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George Seby is thinking about doing some speculating in interest rates. He thinks rates will fall and, in response, the price of Treasury bond futures

George Seby is thinking about doing some speculating in interest rates. He thinks rates will fall and, in response, the price of Treasury bond futures should move from

90

-26.3

,

their present quote, to a level of about

97

.

Given a required margin deposit of

$ 1 comma 040

per contract, what would George's return on invested capital be if prices behave as he expects?

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