Question: (5 points) (a) Assuming an upward sloping yield curve, explain why the swap rate curve is less than the Eurodollar curve for a given maturity.

(5 points) (a) Assuming an upward sloping yield curve, explain why

(5 points) (a) Assuming an upward sloping yield curve, explain why the swap rate curve is less than the Eurodollar curve for a given maturity. [3 marks] (b) State an alternative instrument to a Eurodollar future that can be used to hedge interest rate risk, and also state the two different settlement options for this instrument. [2 points)

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