Explain why selling futures contract on french bonds

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Reference no: EM132064380

Pico plc has borrowed heavily in euros and is worried about increasing interest rates in the eurozone. The Finance Director suggests that Pico plc should sell futures on French bonds (known as OATs or Obligations Assimilables du Trésor).

a. Explain why selling a futures contract on French bonds would reduce the effect of an increase in euro interest rates

Reference no: EM132064380

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