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Suppose you have $100 million in LIBOR loans and you wish to hedge the interest rate risk of this position. You have 2 choices: trade

Suppose you have $100 million in LIBOR loans and you wish to hedge the interest rate risk of this position. You have 2 choices: trade FRAs or ED futures.

a.Would you buy or sell ED futures?

b.Discuss the similarities and differences between these two choices. (Assume the FRAs are paid-in-arrears FRAs

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