Ask Question
1 March, 23:57

Bill Baher, a private investor, purchased a futures contract on Treasury bonds at a price of 102-12. Two months later, Baher sells the same futures contract in order to close out the position. At that time, the futures contract specifies 103-15. What is Baher's nominal profit? The par value of the futures contract is $100,000.

a. $1,030.00; profitb. $1,030.00; lossc. $1,093.75; profitd. $1,093.75; losse. none of the above

+5
Answers (1)
  1. 2 March, 00:10
    0
    c. $1,093.75; profit

    Explanation:

    the second term stand for portion of the nearest 1/32

    this means : it was purchased at:

    102 + 0.01 x 12/32

    and sold at 103 + 0.01 x 15/32

    difference: 1 + 0.01 x 3/32

    $100,000 x (1 + 0.01 x 3/32) =

    100,000 x 0.0109375 = 1,093.75
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Bill Baher, a private investor, purchased a futures contract on Treasury bonds at a price of 102-12. Two months later, Baher sells the same ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers