KKR issues a $10 million 18-month floating rate note priced at LIBOR plus 400 basis points.

44. What is KKRs hedge position if it wants to completely hedge the interest rate risk exposure using an option on a 91-day Treasury bill futures contract?

1. Sell 10 put options on the 91 day Treasury bill futures contract.
2. Buy 10 put options on the 91 day Treasury bill futures contract.
3. Buy 10 call options on the 91 day Treasury bill futures contract.
4. Sell 10 call options on the 91 day Treasury bill futures contract.
5. Buy 1 put option on the 91 day Treasury bill futures contract.

45. What is KKRs hedge position if it wants to completely hedge the interest rate risk exposure using a 91-day Treasury bill futures contract?

1. Buy 1 $1 million 91-day Treasury bill futures contract.
2. Buy 10 $1 million 91-day Treasury bill futures contract.
3. Sell 10 $1 million 91-day Treasury bill futures contract.
4. Sell 1 $1 million 91-day Treasury bill futures contract.
5. Sell 1 $10 million 91-day Treasury bill futures contract.

46. What is KKRs interest rate risk exposure and how can it be hedged?

1. KKR is exposed to interest rate increases; short hedge by selling futures and/or buying put options.
2. KKR is exposed to interest rate increases; long hedge by buying futures and/or buying call options.
3. KKR is exposed to interest rate decreases; long hedge by buying futures and/or buying call options.
4. KKR is exposed to interest rate decreases; short hedge by selling futures and/or buying put options.
5. KKR is exposed to interest rate increases; short hedge by buying futures and/or buying call options.

47. Assume that KKR had hedge the interest rate risk with a US Treasury bill futures contract priced at 94.75. What would the hedge positions value be if Treasury bill yields increased by 25 basis points?

1. $632 per contract
2. $986 per contract
3. $250 per contract
4. $2,500 per contract
5. No change

Please explain the answers.