A borrower needs to borrow $10 million from March next year for three months. The borrower decides to use 10 Eurodollar Futures contacts to hedge. Should the borrower take long or short position? If the current price of March Eurodollar Futures contact is 94.4, what will be the borrowers payoff from the futures position if the 3-month effective LIBOR is 2% in March, i.e., 8% annualized?

A. Long position. The payoff in March is $60,000.

B. Longposition.ThepayoffinJuneis$61,200.

C. Shortposition.ThepayoffinMarchis$60,000.

D. Short position. The payoff in March is $60,000.

E. Short position. The payoff in June is $61,200.