Your financial firm needs to borrow $200 million by selling time deposits with 270 day maturities. If interest rates on comparable deposits are currently at 3%, what is the cost of issuing these deposits? Suppose interest rates decline to 2%. What then will be the cost of these deposits? What position and type of hedge could be used to deal with this cost change? In response to the above scenario, management buys 200270 day Eurodollar time deposit futures contracts trading at an index price of 96 . Interest rates decline as anticipated and your firm offsets its position by selling 200 contracts at an index price of 96.5. What type of hedge is this? What before tax profit or loss is realized from the futures position? Long futures hedge, 3,75m profit Short futures hedge, 750k loss Short futures hedge, no profit or loss Long futures hedge, 750k profit