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Tree Row Bank wishes to take a position in Treasury bond futures contracts, which currently...

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Finance

Tree Row Bank wishes to take a position in Treasury bond futures contracts, which currently have a quote of 95-040. Tree Row thinks interest
rates will go up over the period of investment. (10-2)
a. Should the bank go long or short on the futures contracts?
b. Calculate the net profit to Tree Row Bank if the price of the futures contracts decreases to 94-280.
c. Calculate the net profit to Tree Row Bank if the price of the futures contracts increases to 95-210.
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