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What is the profit from closing out the futures position

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Question - A fund manager expects to have funds to invest in three months' time and plans to buy $4 million corporate bonds, currently yielding 7.00% p.a. The manager hedges their interest rate risk using three-year Treasury bond futures contracts, currently priced at 94.500. In three months' time the fund manager buys $2 million corporate bonds at yield of 6.84% p.a. and closes out their futures market position at 95.250. What is the profit from closing out the futures position?

Reference no: EM133050711

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