The other alternative is to purchase a PUT contract on euro

denominated bonds.

Calculate the net profit or loss per unit on a put option contract with

a strike price of 1,008 with a premium of 4.00 for the following

maturity prices:

985, 1,000, 1,015 and 1,020

f. Explain how the option contract in part e protects against interest

rate rises and how this form of protection differs from the futures

contract.