Question: Your company has set up a US$ commercial paper program in the amount of $75 million U.S. and is turning it over every 30 days.

Your company has set up a US$ commercial paper program in the amount of $75 million U.S. and is turning it over every 30 days. Recent economic predictions have noted that interest rates are likely to rise over the next year (the Fed is predicting 3 interest rate hikes in 2021/22). Set up a hedge structure (note the number of contracts you will have to use for each month) using Eurodollar futures (contract size is $1 million) - note the percentage hedged: Contract month Price Jan 98.36 Feb 98.31 Mar 98.24

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