If you buy in February a bond future contract for 120 that matures on June 30 of the same year, and at the maturity date the same future sells for 110, you have a ________ of $________.
A) loss; 10000
B) loss; 10
C) profit; 10000
D) profit; 10

Question

Quizplus · Accepted Answer

Bond futures contracts typically represent a notional value of $100,000. If the price of the bond future contract decreases from 120 to 110, it indicates a loss of 10 points. Since each point represents $1,000, a 10-point decrease results in a $10,000 loss.

If You Buy in February a Bond Future Contract for 120