3. Interest rate futures contracts 1. 2. 3. STEP: 2 of 3 Suppose that Eleanor forecasts that interest rates will decrease over the next month, so she calls a broker and purchases50 futures contracts on Treasury bonds that have settlement dates for three months from now. If the futures contracts on Treasury bonds represent $100,000 of par value, and the market value of the contract is 95-00, then Eleanor will have invested $4,750,000 in the futures contracts. Suppose the market value of the contracts after one month is 93-00, and Eleanor decides she wants to offset her current position. If she wants to offset her position, Eleanor would purchase 2 Treasury note futures contracts, resulting in a total loss of $100,000. (Hint: Assume that there were no transaction costs and that the values you enter are all positive numbers.) Grade Step 2 TOTAL SCORE: 1/4 (to complete this step and unlock the next step)