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Use the following information for questions 13 through 17. On September 16, a bank needs to issue $55 million of 180-day Eurodollar time deposits. The
Use the following information for questions 13 through 17. On September 16, a bank needs to issue $55 million of 180-day Eurodollar time deposits. The current rate of such time deposits is 7.25%. The bank is considering the alternative of issuing a 90 day time deposit at its current rate of 6.75% and selling a eurodollar futures contract. The rates available in the spot and futures market are such that the bank can obtain a better rate by issuing a 90 day time deposit for $55 million. The December Eurodollar IMM index is at 93, implying a price per $100 face value of 98.25. If the price per contract is the $982,500 the bank should sell Select one: O a. 56 contracts O b. 66 contracts O c. 44 contracts O d. 50 contracts
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