Treasury bond futures contracts, premium on call option
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1) A financial institution that maintains some Treasury bond holdings decides to sell some Treasury bond futures contracts. If interest rates increase, the market value of the bond holdings will ______ and the position in futures contracts will result in a _______.
a increase; gain
b increase; loss
c decrease; gain
d decrease; loss
2) The premium on an existing call option should ______ when the underlying stock price decreases
a. be negative
b decline
c. increase
d. be unaffected
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Answers MCQs on Treasury bond futures contracts, premium on an existing call option.
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1) A financial institution that maintains some Treasury bond holdings decides to sell some Treasury bond futures contracts. If interest rates increase, the market value of the bond holdings will ______ and ...
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