Exam 13: Financial Futures Markets

Evan purchased a futures contract on Treasury bonds at a price of 102-12. Two months later, Evan sells the same futures contract in order to close out the position. At that time, the futures contract specifies 103-15. What is Evan's nominal profit? The par value of the futures contract is $100,000.

The use of financial leverage

The value of a stock index futures contract has little correlation with the value of the underlying stock index.

A financial institution that wishes to reduce its exposure to the possibility of declining interest rates might use

Purchasers of currency futures contracts are required to hold the contract until the settlement date and accept delivery of the foreign currency at that time.

Systemic risk reflects the risk that a particular event could

As applied to the futures markets, the basis is the