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

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

(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.

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