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Posted on May 17, 2024

You are planning a $25 million 5 yr bond issue in 6 months. You can either hedge with Eurodollar futures (1 million per contract)

You are planning a $25 million 5 yr bond issue in 6 months. You can either hedge with Eurodollar futures (1 million per contract) or 5 yr T-Note futures ($100,000 per contract). Structure a hedge using one of these instruments and explain your choice.

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