Commercial paper with a maturity

Reference no: EM1345126

Suppose that it is 2/20/2013 and a treasurer realizes that on 7/17 the company will have to issue $5 million of commercial paper with a maturity of 180 days. If the paper were issued today, the company 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. The September Eurodollar futures price is quoted as 92. How should the treasurer hedge the company's exposure?

Reference no: EM1345126

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