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Styles A company is looking to invest $10 million for 180 days in the Eurodollar market. The return on 180-day Eurodollar deposit is currently 55%.

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Styles A company is looking to invest $10 million for 180 days in the Eurodollar market. The return on 180-day Eurodollar deposit is currently 55%. The annual return on a 90-day Eurodollar deposit is currently 5.2%. There is also a Eurodollar futures contract expiring in 90 days. The futures contract is currently at an IMM index of 93.75. a. What annual rate of investment can the company lock-in for the three-month period starting three months from now (a day to day 180) by buying forward contracts? b. Does the company expect to do better by investing in the 180 day Eurodollar deposit or does the company expect to do better by both investing in the 90-day Eurodollar deposit and buying futures contracts ? c. What would the IMM Index on the futures contract have to be today for the company to be indifferent between the alternates in part b

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