Question

1. Spratt Company purchased Treasury bond futures contracts when the quoted price was 93-50. When this position was closed out, the quoted price was 94-75. Determine the profit or loss per contract, ignoring transaction costs.

Answer 1

–$12,500

Step-by-step explanation:

Calculation to determine Determine the profit or loss per contract

Using this formula

Profit or loss per contract=Purchase price-Selling price

Let plug in the formula

Profit or loss per contract= $935,000 – $947,500

Profit or loss per contract= –$12,500

Therefore the profit or loss per contract will be –$12,500