Question: 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

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.

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