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Chipman Co. will suffer an increase in borrowing costs if the 13 week treasury bill rate increases in the next 6 months. The company plans to hedge...

Chipman Co. will suffer an increase in borrowing costs if the 13 week treasury bill rate increases in the next 6 months. The company plans to hedge it risk exposure using an interest rate collar. The premium on the call is 0.75 and the premium on the put is 0.85. What is the companys profit (or loss) in the option market if the T-bill rate is 4.5% in 5 months, If the T-bill is 5.5% and 6.5%?

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call n put.docx

Chipman Co. will suffer an increase in borrowing costs if the 13 week treasury bill rate
increases in the next 6 months. The company plans to hedge it risk exposure using an interest
rate collar....

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