Can someone please explain?
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Franco wants to hedge against the rising interest rate so to hedge he must go long on interest rate which means go short on bond i.e eurodollar futures but as per comment he buys call on eurodollar i.e long on eurodollar.
To hedge he has to buy a put i.e short on eurodollar which means he expects that interest rate will rise so if r rises then eurodollar future falls and he gains from put and hence he hedged against r rises