Examine an ex-post short hedging position for a future T-bond or T-note sale.

a. Select a futures contract and use one of the cheapest-to-deliver bonds or notes on the contract as the bond or note you plan to sell and use the expiration date on the futures as the date of your bond or note sale.

b. Use the Chart screen (Chart ) to create multigraphs for the prices on futures and cheapest-to-deliver bond. On the Chart Menu screen, select the Standard G chart; once you have loaded your securities, go to "Edit" to put your graphs in separate panels.

c. Select a beginning date that you would have implemented your hedge and a closing date near the futures expiration as the date for the bond sale and closing your hedge. Calculate the profit or loss on the futures position from opening and closing at the futures prices at the beginning and ending dates, the revenue from selling the cheapest-to-deliver bond on the closing date, and the hedged revenue (bond sale plus futures profit). Compare your hedged revenue to the unhedged revenue. In retrospect, was the hedge a good strategy?