The duration of a 3-month Treasury futures contract is 4.89 years. What is the duration of the underlying Treasury note?

A. 5.12 years

B. 4.64 years

C. 4.38 years

D. 5.24 years

You write covered call with a strike price of $65 and an option premium of $2.35. Assume the stock price is $65.22 currently and that it falls to $64 and remains there until the option expires. What will be the result?

A. Keep both your stock and the option premium

B. Lose your stock and keep the option premium

C. Keep your stock but lose the option premium

D. Lose your stock and the option premium

Which one of the following is a difference between a forward contract and a futures contract?

A. Forward contracts are based on commodities while futures contracts are based on financial instruments.

B. Futures contracts are managed through an organized exchange while forward contracts are not.

C. The price of the asset exchanged is determined when a forward contract is entered while the price is set on the exchange date

for a futures contract.

D. A forward contract is a formal agreement while a futures contract is an informal agreement.