An Australian company will need to borrow $10 million dollars in 3 months' time, and is concerned that interest rates will rise in the meantime.

Which of the following are appropriate strategies for the company to hedge its interest rate risk?

Select one:

A.

Selling 10 bank bill futures contracts.

B.

Buying 10 bank bill futures contracts.

C.

Buying a 90-day FRA from a financial institution with a principal of $10 million.

D.

Selling a 90-day FRA to a financial institution with a principal of $10 million.

E.

Both A. and C. are appropriate hedging strategies.

F.

Both A. and D. are appropriate hedging strategies.

G.

Both B. and C. are appropriate hedging strategies.

H.

None of the strategies listed will hedge the interest rate risk faced by the company.