Suppose the September Eurodollar futures contract has a price of 94.4. You plan to borrow $125,000,000 for 3 months in September at LIBOR, and you intend to use the Eurodollar contract to hedge your borrowing rate. Assuming the true 3-month LIBOR is 1.5% in September, what is the settlement in dollars at expiration of the Eurodollar futures contract?
Question 8 options:
$225,000
-$225,000
-$125,000
$125,000
$850,000
-$850,000