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Kentucky FryChicken, has secured funding for its new office on the island of Ambergris Caye Belize in Central America. It must pay floating-rate interest three

Kentucky FryChicken, has secured funding for its new office on the island of Ambergris Caye Belize in Central America. It must pay floating-rate interest three months from now. It wants to lock in these interest payments by buying an interest rate futures contract. Interest rate futures for three months from now settled at 96.70, for a yield of 4.75% per annum.

a. If the floating-rate interest three months from now is 4.25%, what did Kentucky gain or lose? SHOW WORKING

b. If the floating-rate interest three months from now is 7.00%, what did Kentucky gain or lose? SHOW WORKING

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