Stohs Semiconductor Corporation plans to issue $50 million of 20-year bonds in 6 months. The interest rate

Question:

Stohs Semiconductor plans to issue $50 million of 20-year bonds in 6 months. The interest rate would be 9% if the bonds were issued today. How can Stohs set up a hedge against an increase in interest rates over the next six months? Assume that 6-month futures sell for 100’22.

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...