A wealthy investor holds $600,000 worth of U.S. Treasury bonds. These bonds are currently being quoted at 104% of par. The investor is concemed, 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 hedge using T-bond futures contracts. Assume theso contracts are now trading at 110-20. a. Briefly describe how the investor would set up this hedge. Would he go long or shot? . How many contracts would he need? b. Irs now six months later, and rates have indeed gone up. The investor's Treasury bonds are now being quoted at 94.5% of par, and the T-bond futures contracts used in the hedge are now trading at 96-00. Show what has happened to the value of the bond portfollo and the proft (or loss) made on the futures hedge. c. Was this a suocessful hedge? Explain. a. How would the investor sot up the hedge? (Select the best answer below) A. The investor needs to thort 60 T-bond futures contracts to hedge. B. The investor needs to take a long pesition in 6 T.bond futures contracts to hedge. C. The investoe needs to take a fong position in 60 T-bond futures contracts to hodge, D. The inwestor needs to short 6 T-bond futures contracts to hedge