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Question: Assume that Guyton wishes to hedge its net worth position with T-bond futures (20-year maturity, 8% coupon) and that the current price of the underlying T-bond is $82, 841 on face of $100,000. The annualized market yield is therefore 10.00%, and the duration for these bonds is 9.3854. How many contracts are necessary to fully hedge Guyton assuming that yield changes in the spot and futures markets are equivalent?

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