A woalthy investor holds $700,000 worth of U.S. Treasury bonds. These bonds are currently being quoted at 104.5% of par. The irvestor is concomed, however, that rates are hesded up over the noxt six months, and he would like to do something to protect this bond portfolo. His broker advises him to set up a hedge using T-bond futures contriets. Assume thase contracts aro now trading at 112-16. a. Briefy describe how the investor would sot up this hedge. Would he go long or short? How many contracts would he need? b. Its now six months latec, and rutes have indeed gone up. The investor's Treasury bonds are now being quoted at 93.5% of par, and the T-bond futures contracts used in the hedge are now trading at 96-28. Show what has happened to the value of the bond portlolio and the profit (or loss) made on the futures hedge. c. Was this a successful hedge? Explain. a. How would the investor set up the hedge? (Select the best answer below.) A. The frivestor needs to take a long position in 7 T-bond futures contracts to hedge. B. The investor needs to take a long position in 70 T-bond futures contracts to hedge. c. The ievestor needs to ahoet 7 T.bond futures contracts to hedge. 0. The investor needs io short 70 T-bond futures contracts to hedge. b. The prote (ol loss) on the bond portidio at the expiration date of the futures contracts is 5 . (Round to the neacost cent. Enter a postive number for a preft and a negacve number for a loss.)