Question: 4)A bond trader has bought a position in Treasury bonds with 4% annual coupon rates on Feb 15, 2015. The DV01 of the position is

4)A bond trader has bought a position in Treasury bonds with 4% annual coupon rates on Feb 15, 2015. The DV01 of the position is USD 80,000. The trader decides to hedge this interest rate risk with the 4.5% coupon rate Treasure bonds maturing on May 15, 2017 which has a DV01 of 0.076 per USD 100 face value. To implement this hedge, approximately what face amount of 4.5% Treasury bonds maturing on May 15, 2017 should the trader sell ? Please show the calculations.

USD 80,000
USD 10,500,000
USD 80,000,000
USD 105,000,000
USD 115,000,000

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