Financial Derivatives English Edition Chapter 6 Question BankFundamentals of Futures and Options Markets 8e Hull Chapter 6 Interest Rate Futures 1 Which of the following is applicable to corporate bon

into a long position in a Treasury bond futures contract at a price of 102.5. The contract has a face value of $100,000 and the quoted price is in 32nds. What is the dollar value of the contract? A) $102,500 B) $103,125 C) $100,000 D) $32,500 Answer: B 7) A Treasury bond futures contract has a face value of $100,000. If the quoted price is 102-16, what is the dollar value of the contract? A) $102,500 B) $102,625 C) $100,000 D) $32,500 Answer: B 8) Which of the following is TRUE about the delivery process for Treasury bond futures contracts? A) The seller chooses which bond to deliver. B) The buyer chooses which bond to receive. C) The exchange randomly selects which bond will be delivered. D) Both the buyer and seller must agree on which bond will be delivered. Answer: A 9) Which of the following is NOT a risk faced by traders in the Treasury bond futures market? A) Interest rate risk B) Basis risk C) Credit risk D) Liquidity risk Answer: C 10) Which of the following is used to adjust the price of a bond to reflect the value of the accrued interest? A) Conversion factor B) Cheapest-to-deliver bond C) Invoice price D) Accrued interest factor Answer: