Calculate the net profit to tree row bank

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Question: 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.

a. Should the bank go long or short on the futures contracts?

b. Given your answer to part (a), calculate the net profit to Tree Row Bank if the price of the futures contracts decreases to 94-280.

c. Given your answer to part (a), calculate the net profit to Tree Row Bank if the price of the futures contracts increases to 95-210.

Reference no: EM131632924

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