A manager wishes to hedge a bond with a par value of $20 million by selling Treasury
Question:
Answer the below questions.
(a) What is the hedge ratio?
(b) How many Treasury bond futures contracts should be sold to hedge the bond? Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
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