Question
Portfolio revisions using bond futures contracts. Consider the following original portfolio and revise it with bond futures contracts. Stock 4,000,000 Bonds 4,000,000 Cash 4, 000
Portfolio revisions using bond futures contracts.
Consider the following original portfolio and revise it with bond futures contracts.
Stock 4,000,000
Bonds 4,000,000
Cash 4, 000 000
Total 12,000,000
Revise the above portfolio with bond futures contracts using Treasury bonds futures that are priced at 162-20. You decide to go long 12 Treasury bond futures contracts.
Treasury bond futures contracts are based on $100,000 par value. Show full calculation and show your revised portfolio including dollar values and percentages.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To revise the portfolio using bond futures contracts we need to calculate the value of the Treasury bond futures contracts and adjust the allocation a...
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Step: 2
Step: 3
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
