In Questions 1 through 6, you will work with data relevant to the Fed's monetary policy goals: overnight lending rates. The most relevant data sources here will likely be:

• https://www.frbdiscountwindow.org/(Links to an external site.)(Federal Reserve Discount Window)
• https://www.newyorkfed.org/markets/reference-rates(Links to an external site.)(Federal Reserve Reference Rates, including EFFR and SOFR)
• https://www.cmegroup.com/markets/interest-rates/stirs/30-day-federal-fund.quotes.html(Links to an external site.)(Quotes for 30-day federal funds futures and options)
• https://www.cmegroup.com/markets/interest-rates/stirs/30-day-federal-fund.html(Links to an external site.)(Overview of how quotes for 30-day federal funds futures and options are structured/understood; please ensure that you review the section titled "Explore this product in depth" to understand how to read the quotes and how to convert them into a federal funds rate expressed in percentage)
• https://fred.stlouisfed.org/(Links to an external site.)(FRED: Federal Reserve Economic Data; you may be particularly interested in the series titled EFFR and SOFR).

1. What was theSOFRrate onMay 16, 2022?
2. Is it generally cheaper to borrow at the Fed's discount window than from the federal funds market?
   • Yes, it is generally cheaper to borrow at the Fed's discount window.

• No, it is generally cheaper to borrow from the federal funds market.

1. Would you rather borrow at the federal funds market than from the discount window if your bank is in the 99thpercentile of the distribution (i.e., considered to be among the riskiest counterparties in the federal funds market)? Please consider the cost of funds (interest rate) to be your primary consideration when making this decision and answering this question.
   • Yes, I would prefer to borrow at the federal funds market.
   • No, I would prefer to borrow at the discount rate window.

1. Was the volume of SOFR transactions larger than the federal funds transaction volume on May 16, 2022?
   • Yes, the volume of SOFR transactions was larger than the volume of federal funds transactions on May 16, 2022.
   • No, the volume of SOFR transactions was smaller than the volume of federal funds transactions on May 16, 2022.

1. Do the federal funds rate (EFFR) and the secured overnight financing rate (SOFR) generally move together fairly closely?

Note:To answer this question, you may want to plot the behavior of both EFFR and SOFR series using the tools provided byFRED(Links to an external site.). To include both series on the same chart, please follow these steps:

• Generate a chart for one of the series (for example, search for "EFFR" athttps://fred.stlouisfed.org/(Links to an external site.))
• Click onEdit Graphbutton, chooseAdd Linetab, enter the name of the second series (in this case, "SOFR"), choose the best match, and clickAdd data series.
• Close the editing menu and play with the dates to examine the behavior of the series. When you move the mouse across the lines in the graph, the chart will display the values for both series as of both dates.
  • Yes
  • No

1. According to theCME Group's 30 Day Federal Funds Futures and Options Quotes page(Links to an external site.)(please make sure to review both the quotes page and the directions for interpreting the quotes), what federal funds rate (in percent) do market participants expect inJuly 2023?