PORTFOLIO AND TREASURY BOND FUTURES CONTRACT CHARACTERISTICSSecurity Modified Duration Basis Point Value Conversion Factor for Cheapest to Deliver Bond Portfolio Value / Future Contract PricePortfolio 10 years $100,000 Not Applicable $100,000,000U. S. Treasury bond futures contract 8 years $75.32 1 94-05Discuss two reasons for using futures rather than selling bonds to hedge a bond portfolio. No calculations required. State three reasons why Klein’s hedging strategy might not fully protect the portfolio against interest rate risk. Describe a zero-duration hedging strategy using only the government bond portfolio and options on U. S. Treasury bond futures contracts. No calculations required.