How Many 90-Day Eurodollar Futures Contracts Should a Bank Purchase

question 57

Multiple Choice

How many 90-day Eurodollar futures contracts should a bank purchase to hedge the roll-over of a 1-year, $5 million loan if loan rates and Eurodollar rates have the same volatility?

• A) 1 contract
• B) 5 contracts
• C) 10 contracts
• D) 20 contracts
• E) 50 contracts

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