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Endowments and foundations include colleges, private schools, museums, and hospitals. The investment income generated from the funds invested by endowments and foundations is used for the operation of the entity. In the case of a college, the investment income is used to meet current operating expenses and capital expenditures (i.e., the construction of new buildings [...]

Two broad strategies exist for interest rate futures arbitrage. Interest rate futures contracts on US Treasury bonds or bills allow for the delivery of the actual bond or a close equivalent (Eurodollar futures involve cash settlement). Take a 20-year bond, with a 8% coupon rate trading at par ($10 000). Assume that this is the [...]