The company expects to borrow approximately $1 million in three months. The current rate of interest is 6.00% p.a. but is forecast to rise. To hedge the position, the company wishes to use 3 year Treasury bond futures contracts trading at 93.500. Calculate the profit or loss from the position in futures market if in 3 months the contracts are trading at 95.000.
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The company expects to borrow approximately $1 million in three months. The current rate of interest is 6.00% p.a. but is forecast to rise. To hedge the position, the company wishes to use 3 year Treasury bond futures contracts trading at 93.500. Calculat
All of the statements below are not false, except: 1. Changes in interest rates represent a risk for both borrowers and investors because of diminishing investment prospects and increased cost of borrowing; II. Failure to pay accounts receivable on time by customers may have a significant negative impact on the capital base of a company; III. Companies involved in cross-border trades are subject to FX risks: IV. It is essential for banks to assess the creditworthiness of customers to mitigate...