n March 2022, ABC Co. is considering the issuance of $100 million 10-year bonds rated AAA. The issue will most likely be registered and sold some time in June. ABC Co. desires to hedge the pending issue using Treasury bond futures contracts each representing $100,000. In order to hedge the bond issue, ABC Co. must a. Sell 1,000 contracts b. Buy 1,000 contracts c. Sell 100 contracts
n March 2022, ABC Co. is considering the issuance of $100 million 10-year bonds rated AAA. The issue will most likely be registered and sold some time in June. ABC Co. desires to hedge the pending issue using Treasury bond futures contracts each representing $100,000. In order to hedge the bond issue, ABC Co. must a. Sell 1,000 contracts b. Buy 1,000 contracts c. Sell 100 contracts
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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On March 2022, ABC Co. is considering the issuance of $100 million 10-year bonds rated AAA. The issue will most likely be registered and sold some time in June. ABC Co. desires to hedge the pending issue using Treasury bond futures contracts each representing $100,000. In order to hedge the bond issue, ABC Co. must
a. Sell 1,000 contracts
b. Buy 1,000 contracts
c. Sell 100 contracts
d. Buy 100 contracts
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