1. Briefly describe the historical development of the eurodollar market, and be sure to explain which key events motivated the market's rapid growth.
2. Twitter is trading at $34.50. Call options with a strike price of $35 are priced at $2.30. What is the intrinsic value of the option, and what is the time value?
3. Three months from today you plan to borrow $1.8 Billion for 6 months at LIBOR. You hedge 65% of your interest rate risk with a euro dollar futures contract priced at 99.2. If settled in arrears, what is your payment if the 6-month LIBOR is .28% in two months?