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    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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    Solution Preview

    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 ...

    Solution Summary

    Answers MCQs on Treasury bond futures contracts, premium on an existing call option.

    $2.19

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