Use the following information for questions 16-18: A portfolio manager plans to use a Treasury bond futures contract to hedge a bond portfolio over the next six months. The portfolio is worth $50 million and will have a duration of 3.0 years in six months. The futures price is 112, and each futures contract is on $100,000 of bonds. The bond that is expected to be cheapest to deliver will have a duration of 7.0 years at the maturity of the futures contract. Question 16 1 pts What position in futures contracts is required? (a) Short 1042 tracts O (b) Short 191 contracts (c) Short 346 contracts (d) None of the above Question 17 1 pts What is the new position if after two months the bond that is expected to be cheapest to deliver changes to one with a duration of 6.0 years? o (a) Short 223 contracts O (b) Short 191 contracts O (c) Short 446 contracts (d) None of the above > Question 18 1 pts Suppose that all rates fall over the six months, but long-term rates fall less than short-term rates, then O (a) The gain in the bond portfolio will exceed the loss in the futures contracts O (b) The gain in the bond portfolio will be less than the loss in the futures contracts O (c) The loss in the bond portfolio will exceed the gain in the futures contracts (d) The loss in the bond portfolio will be less than the loss in the futures contracts O (e) None of the above