1) The forward rate on a 3 month investment that starts in 3 months on a quarterly compounded basis is closest to: a. 1.75% b. 7.06% C. 7.00% 2) The 3-month Eurodollar futures price quote for a contract with a delivery date in 3 months should be: a. 93.0000 b. 93.0367 C. 92.9400 3) The 3-month Eurodollar futures price quote for a futures contract with a delivery date in 3 months 94. The size of the Eurodollar futures contract is $1 million. Use this information to answer this and the next question. Which of the following is the correct arbitrage strategy? a. Invest at the 6 month LIBOR rate, borrow at the 3 month LIBOR rate, sell the Eurodollar futures contract b. Borrow at the 6 month LIBOR rate, invest at the 3 month LIBOR rate, buy the Eurodollar futures contract C. Borrow at the 6 month LIBOR rate, invest at the 3 month LIBOR rate, sell the Eurodollar futures contract 4) A treasurer plans to invest in commercial paper with a maturity of 6 months and a face value of $10 million in 3 months. If invested right away, the investment would have a value of $9,753,099. The treasurer should hedge its interest rate risk by: a. Selling 19.8032 Eurodollar futures contracts b. Buying 9.9016 Eurodollar futures contracts c. Buying 19.8032 Eurodollar futures contracts