A wealthy investor holds $400,000 worth of U.S. Treasury bonds. These bonds are currently being quoted at 106% of par. The investor is concerned, however, that rates are headed up over the next six months, and he would like to do something to protect this bond portfolio. His broker advises him to set up a hodgo using T-bond futures contracts. Assume these contracts are now trading at 112-16 a. Briefly describe how the investor would set up this hedge. Would he go long or short? How many contracts would he need? b. It's now six months later, and rates have indeed gone up. The investor's Treasury bonds are how being quoted at 93% of par, and the T-bond futures contracts used in the hedge are now trading at 98-24. Show what has happened to the value of the bond portfolio and the profit (or loss) made on the futures hedge. c. Was this a successful hodge? Explain. a. How would the investor set up the hedgo? (Select the best answer below) O A. The investor needs to short 40 T-bond futures contracts to hedge OB. The investor needs to take a long position in 4 T-bond futures contracts to hedge, OC. The investor needs to take a long position in 40 T-bond futures contracts to hedge OD. The investor needs to short 4 T-bond futures contracts to hodge Click to select your answer and then click Check Answer 06 Final Check Clear All parts remaining Please upuote 806 PM 12/2/2020 here to search O 6 2 8 9 3 E R T T Y