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The 90-day BAB futures contract is trading at $95. You believe that interest rates will fall in the near future. Note: the contract value is
The 90-day BAB futures contract is trading at $95. You believe that interest rates will fall in the near future. Note: the contract value is always $1,000,000, and the yield is the futures price deducted from 100.
a) What position should you take in the futures market? b) Assume that you take such a position and close out the position at 93. Have you made a profit or loss?
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