igotafeva
Nov 29, 2010, 07:47 PM
In order to hedge against the possible rate increase described in part e, Midland
Decides to hedge its position in the futures market. Assume it sells $500,000
Worth of 12-month futures contracts on Treasury bonds. One year later, interest
Rates go up 2 percent across the board and the Treasury bond futures have gone
Down to $488,000.
Decides to hedge its position in the futures market. Assume it sells $500,000
Worth of 12-month futures contracts on Treasury bonds. One year later, interest
Rates go up 2 percent across the board and the Treasury bond futures have gone
Down to $488,000.