Question

Media Limited has an existing $900 000 promissory note facility which it will rollover in 90 days. The company is concerned that interest rates will rise before the rollover date and enters into a 90 day bank accepted bills futures contract at 92.50. Three months later the company closes out its futures position at 91.75. Using the following data, calculate the profit or loss position of the futures transactions. (Disregard margin calls and transaction costs)

Answer 1