Investments

On January 1, you sold one March maturity S&P 500 Index futures contract at a futures price of 900. If the futures price is 1,000 on February 1, what is your profit or loss? The contract multiplier is $250.(Input the amount as positive value.)

Mike and Sarah are concerned about rising rates thinking rates eventually have to go up? Should they choose a long duration or short duration bond? Mike and Sarah are looking at two bonds a 10 year zero coupon bond and a 30 year zero coupon bond? What is the duration of these two bonds? Which one should they buy to mitigate the risk of rising rates? Their colleague believes interest rates are going to fall. He is looking at a 10 year maturity bond paying a 4% coupon annually, a 10 year zero paying a yield to maturity of 4%, and a five year zero paying a yield to maturity of 4%.

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Which should he buy to play falling future interest rates?

What has the correlation of the ten year treasury been with the S&P 500 returns the last two years?

What has been the advantage of holding part of the portfolio in 10 year treasury bonds over holding more cash during periods of market turmoil in recent years?

Why hold cash at all, even if one is defensive, and instead just hold more treasuries instead?

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