You know that 6 months from now you will need to borrow $12 million US Dollars for
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You know that 6 months from now you will need to borrow $12 million US Dollars for 90 days. You are worried that 90 day USD interest rates will move substantially between now and then and so you decide to take a position in a Eurodollar future to hedge the risk. Explain how you would build the hedge and how the payoff from the futures position would help to remove the interest rate risk.
Related Book For
Introduction To Derivatives And Risk Management
ISBN: 9781305104969
10th Edition
Authors: Don M. Chance, Robert Brooks
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