What is the profit on a hedge if bonds are purchased at


1. What is the profit on a hedge if bonds are purchased at $150,000, two futures contracts are sold at $72,500 each, then the bonds are sold at $147,500 and the futures are repurchased at $74,000 each? show your work

2. For an interest rate of 10% compounded annually, find: a. How much can be loaned now if $2,000 will be repaid at the end of 3 years? b. How much will be required 6 years hence to repay a $50,000 loan made now?

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Financial Management: What is the profit on a hedge if bonds are purchased at
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