A woalthy investor holds $400.000 worth of U.S. Treasury bonds. These bonds are currently being quoted at 104.5% of par. The investor is concemnd, however, that rates ane Readed up over the next six months, and he would like to do something to protect this bond portililio. His broker advises him to set up a hedge using T-bond ficures contracts. Astume these contracts ars new inading ant 112+16 a. Friefly describe how the investor would sot up this hedge. Would he go long or shot? How many contracta would he need? b. Ifs now alx months later, and rases have indeed gone up. The investor's Treasury bonds are now being quoted at 93% of par, and the T.bond futures contracts used in the hadge are now tading at 97.24. Show what has happened to the value of the bond portfollo and the proft (or loss) made on the fuares hedge. c. Was this a succestrul hedge? Explain. a. How would the investor set up the hedge? (Select the bett answer bolow) A. The inveskar needs to short 4 Thond Aitures contracts to hedge. 8. The imvestor needs ta take a long poskion in 40 Teband futures contracts to hedge. C. The imvestor needs to short 40 T-bond futures contracts to hedge. D. The investor needs to take a long position in 4 T-bond futures contracts to hedge