Future Bank is concerned about what an increase in interest rates will do to the value of its bond portfolio. The portfolio currently has a market value of $60 million, and the bank management intends to liquidate $10 million in bonds over the next three months to fund additional corporate loans. If interest rates increase to 6 percent, the bond will sell for $9.7 million. The management sells 40 June Treasury bond contracts at 104-105 today. Interest rates do increase, and in three months later management offsets its position by buying 40 June Treasury bond contracts at 100-110. a- Calculate the potential loss following an increase in interest rates. b- Calculate the potential gain following trading futures. c- Calculate the overall return. d- To fully offset potential loss, what should the bank do? e- Suppose the bank cannot trade more than 40 Treasury bond contracts. Also, assume that the selling quote is as before 104-105 but the purchasing quote not given. What should be the purchasing price (not quote) to fully hedge the potential loss? f- Explain what would happen if the expectation about interest rates does not come true and interest rates decrease