Multiple Choice
How many 90-day Eurodollar futures contracts should a bank purchase to hedge the roll-over of a 6-month, $20 million loan if loan rates and Eurodollar rates have the same volatility?
A) 2 contracts
B) 4 contracts
C) 10 contracts
D) 20 contracts
E) 40 contracts
Correct Answer:
Verified
Correct Answer:
Verified
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