Questions:

Suppose that it is February 20 and a treasurer of a company realizes that on July 17, the company will have to issue $5 million of commercial paper with a maturity of 180 days. If the paper were issued today, It would realize $4,820,000. (In other words, the company would receive $4,820,000 for its paper and have to redeem it at $5,000,000 in 180 days’ time.) The September Eurodollar futures price is quotes as 92.00.How should the treasurer hedge the company’s exposure?

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