Solved: Purchase a treasury bond futures contract, Finance Basics

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Purchase a treasury bond futures contract

Task: Suppose that you purchase a Treasury bond futures contract at $95 per $100 of face value.

Q1. What is your obligation when you purchase this futures contract?

Q2. If an FI purchases this contract, in what kind of hedge is it engaged?

Q3. Assume that the Treasury bond futures price falls to 94. What is your loss or gain?

Q4. Assume that the Treasury bond futures price rises to 97. Mark your position to market.

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Finance Basics: Purchase a treasury bond futures contract

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Finance Basics: Purchase a treasury bond futures contract

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