Question
Eurodollar Futures: It is March, 2019.You expect a cash inflow of $200 million dollars at the beginning of September, 2019, and would like to lock
Eurodollar Futures: It is March, 2019.You expect a cash inflow of $200 million dollars at the beginning of September, 2019, and would like to lock in a 6 month investment (lending) rate on this amount using Eurodollar futures at that time.The following information is currently available on thefutures contracts:
(Each contract is for $1 million of 90 day Eurodollars)
Expiration Date Quoted Futures Price
June 2019 94.36
September 2019 94.15
December 2019 94.06
March 2019 94.02
a. Would you take a long or short position in the contracts?
b. Which contract(s) would you use to take this position?
c. How many contracts would you use?
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