true or false? if false, state why.

The 1-year zero rate is R1, and 2-year zero-rate is R2. Assuming R2 > R1 and continuous compounding, the forward rate for the second year has to be greater than both R and R2. Fed funds rate is a rate for which collateral is posted. A trader enters into a long position in one Eurodollar futures contract. The trader gains $150 when the futures price quote increases by 6 basis points, The conversion factor for a bond is approximately the price it would have if all cash flows were discounted at 8% per annum. If a trader wants to use 3-month Eurodollar futures to lock in a rate on $5 million for 6 months, he/she will need 10 contracts in total A bank's derivatives transactions with a counterparty are worth $10 million to the bank and are cleared bilaterally. The counterparty has posted $10 million of cash collateral. The bank therefore does not have any credit exposure