1.A company has borrowed $20 million for 2 months at an interest rate of one-month LIBOR plus 2%. The interest has to be paid monthly. The second interest payment would be due on September 28 and the company decides to hedge the risk by trading in September Eurodollar futures. The September Eurodollar price is currently quoted at 95.5. How many contracts should the company sell? Round your calculations to the nearest integer.

A.5 contracts

B.6 contracts

C.7 contracts

D.8 contracts

E.9 contracts

why is ans. c