You anticipate a need to borrow USD 10 million in six-months time for a period of three
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You anticipate a need to borrow USD 10 million in six-months’ time for a period of three months. You decide to hedge the risk of interest-rate changes using eurodollar futures contracts. Describe the hedging strategy you would follow. What if you decided to use an FRA instead?
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A simple way to hedge interest rate changes over the next six months is to ent...View the full answer
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