An agent has to borrow $100000 in 6 month time for 3 month. In order to hedge against adverse evolution of interest rate this agent enters into 3 month June-Eurodollar future contract at 98.

a) In which position the agent enters and in how many contract?

b) At settlement date, the quoted spot 3 month Libor rate is 1.95%. Determine the amount exchanged and who pays whom?