Clarke Bank Plans to Satisfy Cash Needs in Nine Months

Clarke Bank plans to satisfy cash needs in nine months by selling its Treasury bond holdings for $4 million.However, Clarke is concerned that interest rates might increase over the next three months.To hedge against this possibility, Clarke plans to sell Treasury bond futures.Thus, Clarke sells ____ futures contract for a price of 99-12.Assuming that the actual price of the futures contract declined to 97-20, Clarke would make a ____ of $____ from closing out the futures position.

A) 40; profit; $76,800
B) 40; loss; $76,800
C) 50; profit; $70,000
D) 40; profit; $70,000
E) none of the above