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2. On Monday, you sold one Eurodollar interest rate futures contract for $97,500. Initial performance bond is $4,000 and the maintenance performance bond is $3,000.

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2. On Monday, you sold one Eurodollar interest rate futures contract for $97,500. Initial performance bond is $4,000 and the maintenance performance bond is $3,000. Daily gain/loss Day Monday Tuesday Wednesday Settle price 97,500 99,500 98,500 Margin balance 4,000 ( ) ( a) Figure out daily gain/loss and the margin balance for Tuesday. Do you receive the margin call or not on Tuesday? (40points) b) Figure out daily gain/loss for Wednesday. (20points) I c) Do you take the current position (short position) on the interest rate futures contract to hedge against the rising or falling interest rate? (20points)

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