ABC plc has a $10$ million loan that is replaced every six months. To hedge against an expected increase in interest

rates, ABC plc opens a position in short sterling interest rate futures at a price of $95\mathrm{.}5.$ When closing out the position

later the price is $94\mathrm{.}75.$

Calculate ABC plc$\text{'}$s amount of profit$/$loss from the future trades.

a$.18,750$

b$.56,250$

c$.75,000$

d$.37,500$

Your answer is incorrect.

The correct answer is:

$18,750$