Two Months from Today You Plan to Borrow $3 Million

question 16

Multiple Choice

Two months from today you plan to borrow $3 million for 6 months at LIBOR.You hedge your interest rate risk with a euro dollar futures contract priced at 93.6.If settled in arrears,what is your payment if the 6-month LIBOR is 2.5% in two months?

• A) $8,500
• B) $10,500
• C) $13,500
• D) $15,500

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Definitions:

Intoxicated Person

An individual whose mental and physical capabilities are significantly impaired due to substances like alcohol or drugs.

Ratification

The act of officially confirming or endorsing a previously unauthorized agreement or action.

Express

Clearly and directly stated, leaving no room for doubt or ambiguity.

Implied

Not directly expressed or stated but understood in the context of the situation or agreement.