Question: Derivative Finance homework. Please answer using Excel This question has to do with the 30-day Federal Funds futures contract. Contract Size $4167*Quote 100-R where R

Derivative Finance homework. Please answer using Excel
This question has to do with the 30-day Federal Funds futures contract. Contract Size $4167*Quote 100-R where R is the arithmetic Price Quotation average of daily effective federal funds rate during the contract month 1/4 of one interest rate basis point Minimum Price Fluctuation or 0.0025 price points Settlement Method Cash Settled Maintenance Margin $250 Initial Margin $275 It is April and the current Fed Funds rate is 2.0303%. The November futures contract is trading at 98.2666. What does the market expect the average Fed Funds rate will be in November If you believe that the market is forecasting too low an average fed funds rate in November should you go long or short the futures contract? long short O O Question Help: Message instructor Submit Question This question has to do with the 30-day Federal Funds futures contract. Contract Size $4167*Quote 100-R where R is the arithmetic Price Quotation average of daily effective federal funds rate during the contract month 1/4 of one interest rate basis point Minimum Price Fluctuation or 0.0025 price points Settlement Method Cash Settled Maintenance Margin $250 Initial Margin $275 It is April and the current Fed Funds rate is 2.0303%. The November futures contract is trading at 98.2666. What does the market expect the average Fed Funds rate will be in November If you believe that the market is forecasting too low an average fed funds rate in November should you go long or short the futures contract? long short O O Question Help: Message instructor Submit
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
