A Fund Manager Plans to Invest in a $40 Million

question 2

Essay

A fund manager plans to invest in a $40 million parcel of 90-day bills in December.Demonstrate how they can hedge the risk of an unexpected rate fall in the BBSW given December BAB futures are now trading at 96.55 and it turns out that the BBSW in December is 3.25%.

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Definitions:

Physician

A professional who practices medicine, which involves promoting, maintaining or restoring health through the study, diagnosis, prognosis, and treatment of disease, injury, and other physical and mental impairments.

Physical Symptoms

Observable or tangible signs of a condition or disease, such as pain, fever, or a rash, in contrast to psychological symptoms.

Conversion Disorder

A mental condition in which a person experiences neurological symptoms, such as blindness or paralysis, without a physical cause, believed to result from psychological stress or conflict.

Blindness

The state or condition of being unable to see due to injury, disease, or a congenital condition.