The treasurer for Pittsburgh Iron Works wishes to use financial futures to hedge her interest rate exposure. She will sell five Treasury futures contracts at $170,000 per contract. It is July and the contracts must be closed out in December of this year. Long term interest rates are currently 8.30 percent. If they increase to 10.50 percent, assume the value of the contracts wit go down by 15 percent. Also, if interest fates do increase by 2.2 percent, assume the firm will thave additional interest expense on its business loans and other commaments of $139,000. This expense, of course, will be separate from the futures contracts a. What will be the profit or loss on the futures contract if interest rates increase to 1050 percent by December when the contract is closed out? b-1. After considering the hedging. what is the net cost to the firm of the incieased interest expense of $139000 ? b-2. What percent of this $139,000 cost did the treasurer effectively hedge away? (Input your answer as a percent rounded to 2 decimal ploces.) c. Indicate whether there would be a profit or loss on the futures contracts if interest rates went down. Loss Profit