You were just notified that you will receive $100,000 in two months from the estate of a deceased relative You want to invest this money in safe, interest-bearing instruments, so you decide to purchase five-year Treasury notes, You believe, however, that interest rates are headed down, and you will have to pay a lot more in two months than you would today for five-year Treasury notes. You decide to look into futures, and find a quote of 108-28.7 for five-year Treasuries deliverable in two months (contracts trade in $100,000 units and require an initial margin is $680) What does the quote mean in terms of price, and how many contracts will you need to buy? How much money will you need to buy the contract, and how much will you need to settle the contract? CID 5-year Treasury notes are quoted at a par value of $100,000. Which of the following is the best answer? (Select the best answer below.) OA. Prices are quoted in increments of 1/32 of 1%, so the quote of 108-28.7 translates into 108-28.7/32, which converts to a quote of 108 89688% of par Five-year Treasury notes have a par value of $10,000, so you will need to buy ten contracts. OB. Prices are quoted in increments of 1/100 of 1%, so the quote of 108-28.7 translates into 108-28.7/100, which converts to a quote of 108.2870% of par. Five-year Treasury notes have a par value of $100,000, so you will need to buy one contract OC. Prices are quoted in increments of 1/100 of 1%, so the quote of 108-28.7 translates into 108-28 7/100, which converts to a quote of 108 2870% of par Five-year Treasury notes have a par value of $10,000, so you will need to buy ten contracts OD. Prices are quoted in increments of 1/32 of 1%, so the quote of 108-28.7 translates into 108-28.7/32, which converts to a quote of 108.89688% of par. Five-year Treasury notes have a par value of $100,000, so you will need to buy one contract
You were just notified that you will receive $100,000 in two months from the estate of a deceased relative You want to invest this money in safe, interest-bearing instruments, so you decide to purchase five-year Treasury notes, You believe, however, that interest rates are headed down, and you will have to pay a lot more in two months than you would today for five-year Treasury notes. You decide to look into futures, and find a quote of 108-28.7 for five-year Treasuries deliverable in two months (contracts trade in $100,000 units and require an initial margin is $680) What does the quote mean in terms of price, and how many contracts will you need to buy? How much money will you need to buy the contract, and how much will you need to settle the contract? CID 5-year Treasury notes are quoted at a par value of $100,000. Which of the following is the best answer? (Select the best answer below.) OA. Prices are quoted in increments of 1/32 of 1%, so the quote of 108-28.7 translates into 108-28.7/32, which converts to a quote of 108 89688% of par Five-year Treasury notes have a par value of $10,000, so you will need to buy ten contracts. OB. Prices are quoted in increments of 1/100 of 1%, so the quote of 108-28.7 translates into 108-28.7/100, which converts to a quote of 108.2870% of par. Five-year Treasury notes have a par value of $100,000, so you will need to buy one contract OC. Prices are quoted in increments of 1/100 of 1%, so the quote of 108-28.7 translates into 108-28 7/100, which converts to a quote of 108 2870% of par Five-year Treasury notes have a par value of $10,000, so you will need to buy ten contracts OD. Prices are quoted in increments of 1/32 of 1%, so the quote of 108-28.7 translates into 108-28.7/32, which converts to a quote of 108.89688% of par. Five-year Treasury notes have a par value of $100,000, so you will need to buy one contract
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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You were just notified that you will receive $100,000 in two months from the estate of a deceased relative You want to
invest this money in safe, interest-bearing instruments, so you decide to purchase five-year Treasury notes.
You believe, however, that interest rates are headed down, and you will have to pay a lot more in two months than you
would today for five-year Treasury notes. You decide to look into futures, and find a quote of 108-28.7 for five-year
Treasuries deliverable in two months (contracts trade in $100,000 units and require an initial margin is $680). What
does the quote mean in terms of price, and how many contracts will you need to buy? How much money will you need
to buy the contract, and how much will you need to settle the contract?
XO
5-year Treasury notes are quoted at a par value of $100,000. Which of the following is the best answer? (Select the
best answer below.)
OA. Prices are quoted in increments of 1/32 of 1%, so the quote of 108-28.7 translates into 108-28.7/32,
which converts to a quote of 108 89688% of par Five-year Treasury notes have a par value of $10,000, so
you will need to buy ten contracts
OB. Prices are quoted in increments of 1/100 of 1%, so the quote of 108-28.7 translates into 108-28.7/100,
which converts to a quote of 108 2870% of par Five-year Treasury notes have a par value of $100,000, so
you will need to buy one contract
OC. Prices are quoted in increments of 1/100 of 1%, so the quote of 108-28.7 translates into 108-28 7/100,
which converts to a quote of 108 2870% of par Five-year Treasury notes have a par value of $10,000, so you
will need to buy ten contracts
OD. Prices are quoted in increments of 1/32 of 1%, so the quote of 108-28.7 translates into 108-28.7/32,
which converts to a quote of 108.89688% of par. Five-year Treasury notes have a par value of $100,000, so
you will need to buy one contract.
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