Appendix: On-The-Run UST Bonds You are evaluating corporate bonds of Tesla (TSLA). You think the Tesla-is-amazing story is way overdone. You think they are not as good a credit as their ratings suggests, and analyst expectations for Tesla's fortunes are just too bullish. Your investment thesis is that over the next three months, Tesla credit spreads will widen by 5%. You decide to short $250 mil Par value of a 10yr Tesla bond. However, you don't want exposure to general interest rates. You decide to put on a long-short pair: you will short TSLA and eo lone an offsettine nar value of USTs. Chonse the mrrect UST hond to lono from Anoendix: On-The-Run UST Bonds. 1 19 What is your net cash position (your "equity") with the long-short pair? 19A: do pay or receive cash, 19B: the omount. Answer in millions to two decimal places (\$oxo6x mil). 20 You are correct, and over three months' time the credit spreads of TSLA widen by 5%. But during this time UST yields have fallen by 20 bps. What is your new net cash position (your "equity")? 20A: do pay or receive cosh, 208: the amount. 21 You close the position, what is your profit or loss? 21A: do you have profit or loss, 21B: the amount. Answer in millions to two decimal places (\$\$0x. 20mil). Appendix: Market Conditions For all problems, assume an initial settlement date of 2/25/2022