In June,Jacqui decides to hedge her planned borrowing of $1,000,000 for 120-days in December.At this time, the yield on 90-day bank bills is 6.5% and contracts for September and December exercise are quoted at 94.15 and 94.25 respectively, however, Jacquibelieves that interest rates will only ease to 6.0% by December.

In December, Jacqui issues commercial paper with a face value of $1 million and 120-day maturity at 3.5% p.a. and closes her futures position when December futures prices are 96.30.

i)Complete the table below to indicate what action Jacqui must take in both the futures and physical markets on each date to hedge the cost of her planned borrowing.

ii)Calculate the profit from her futures trading and her net proceeds (in dollars) from her hedged position.

[Note any assumptions you consider necessary.]