financial derivatives

You are given a portfolio of bonds with value P= 100 and duration DP=1. There are two securities available for hedging, the first has a price of F1=95 and duration DF1=0.8 and the second with a price of F2=92 and duration DF2=1.2. Suggest a duration based hedging strategy for portfolio P. State all of your assumptions. You need to borrow USD 10 million in six-months' time for a period of three months. You decide to hedge the risk of interest-rate changes using Eurodollar futures contracts. Describe the hedging strategy you would follow. What if you decided to use an FRA instead? You are given a portfolio of bonds with value P= 100 and duration DP=1. There are two securities available for hedging, the first has a price of F1=95 and duration DF1=0.8 and the second with a price of F2=92 and duration DF2=1.2. Suggest a duration based hedging strategy for portfolio P. State all of your assumptions. You need to borrow USD 10 million in six-months' time for a period of three months. You decide to hedge the risk of interest-rate changes using Eurodollar futures contracts. Describe the hedging strategy you would follow. What if you decided to use an FRA instead