Question

Dragnet inc. sold Treasury bond futures contracts when the quoted price was 96-25. When this position was closed out, the quoted price was 97-16. Determine the profit or loss per contract, ignoring transaction costs.

Answer 1

$-9,100

Step-by-step explanation:

Calculation to Determine the profit or loss per contract

As given:

Selling Price =$ 962,500

Purchase Price =$ 971,600

Using this formula

Gain / Loss = Selling Price - Purchase Price

Let plug in the formula

Gain / Loss= $962,500 - $971,600

Gain / Loss = $-9,100

Therefore the loss per contract will be $-9,100