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6. A bank holds a 10-year $2 million face value bond with a duration of 8 years. The current price = $950,000. Interest rates are
6. A bank holds a 10-year $2 million face value bond with a duration of 8 years. The current price = $950,000. Interest rates are expected to increase from 9% to 11% over next 3 months. Demonstrate how the bank can use a forward contract to hedge the interest rate risk.
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