Question
Suppose in May you purchase $200,000 face value of U.S. Treasury bonds for a price of $180,000. Suppose that the bond matures in 15 years
Suppose in May you purchase $200,000 face value of U.S. Treasury bonds for a price of $180,000. Suppose that the bond matures in 15 years but that you must sell them at the end of July. a. In the top row in the table below, report the gains or loss that you would incur for selling the bonds for each of the listed potential end-of-July selling prices for the bonds. b. In the middle row in the table below, report the net gain or net loss from purchasing a put option on $200,000 face value Treasury bond futures with a strike price of $180,000 (180 points) and a premium of 2 points ($2,000) with an expiration date at the end of July for each of the potential end-of-July selling prices for the bonds. c. In the bottom row in the table below, report the net gain or net loss from purchasing a call option on $200,000 face value Treasury bond futures with a strike price of $180,000 (180 points) and a premium of 2.5 points ($2,500) with an expiration date at the end of July for each of the potential end-of-July selling prices for the bonds
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