If you sell in March a bond future contract for 97 that matures on June 30 of the same year, and at the maturity date the same future sells for 93, you have a ________ of $________.
A) loss; 4000
B) loss; 4
C) profit; 4000
D) profit; 4

Question

Quizplus · Accepted Answer

profit; 4000Selling a bond future contract at a higher price (97) and then it settling at a lower price (93) at maturity means you profit from the decrease in price. The difference in price is 4 points. In bond futures, each point typically represents $1,000, so a 4-point difference equals a $4,000 profit.

If You Sell in March a Bond Future Contract for 97