Eurodollar futures contract expiring in 3-month is currently trading at 98.00. What is the implied short-term interest
Posted: Thu May 19, 2022 5:27 am
Eurodollar futures contract expiring in 3-month is currently
trading at 98.00. What is the implied short-term interest
rate at the futures expiration?
Group of answer choices
None of these
2.00%
3.00%
1.00%
If the current short-term interest rate is 1% less than the
implied future rate, what is the contract telling you in regard to
investors' expectations for future changes in monetary
policy?
Group of answer choices
Monetary policy may loosen.
Monetary policy may tighten.
Not enough information to answer.
A new client is a regional manager at a multi-national company.
He is hiring you to manage his assets until he retires in 4 years.
You and the client agree his primary investment objective is
preserving purchasing power while limiting volatility, so default
risk and interest rate risk need to be carefully managed. The
client is willing to take some credit risk in pursuit of modest
capital gains, but he expects you to diversify as much as possible
and track the Barclay’s Aggregate Bond index fairly closely. His
salary is generous, so tax-advantaged securities are preferred.
International securities are allowed if the credit rating is
investment grade.
Match
Group of answer choices
Investment time horizon
[ Choose
] High
volatility acceptable
Focus on protection
Medium to long time to
invest
Financially secure or experienced
Short to medium time to
invest Low
volatility preferred
Focus on profits
Financially insecure or
beginner
Financial status and experience
[ Choose
] High
volatility acceptable
Focus on protection
Medium to long time to
invest
Financially secure or experienced
Short to medium time to
invest Low
volatility preferred
Focus on profits
Financially insecure or
beginner
Tolerance for price volatility
[ Choose
] High
volatility acceptable
Focus on protection
Medium to long time to
invest
Financially secure or experienced
Short to medium time to
invest Low
volatility preferred
Focus on profits
Financially insecure or
beginner
Capital gains vs. preservation
[ Choose
] High
volatility acceptable
Focus on protection
Medium to long time to
invest
Financially secure or experienced
Short to medium time to
invest Low
volatility preferred
Focus on profits
Financially insecure or
beginner
trading at 98.00. What is the implied short-term interest
rate at the futures expiration?
Group of answer choices
None of these
2.00%
3.00%
1.00%
If the current short-term interest rate is 1% less than the
implied future rate, what is the contract telling you in regard to
investors' expectations for future changes in monetary
policy?
Group of answer choices
Monetary policy may loosen.
Monetary policy may tighten.
Not enough information to answer.
A new client is a regional manager at a multi-national company.
He is hiring you to manage his assets until he retires in 4 years.
You and the client agree his primary investment objective is
preserving purchasing power while limiting volatility, so default
risk and interest rate risk need to be carefully managed. The
client is willing to take some credit risk in pursuit of modest
capital gains, but he expects you to diversify as much as possible
and track the Barclay’s Aggregate Bond index fairly closely. His
salary is generous, so tax-advantaged securities are preferred.
International securities are allowed if the credit rating is
investment grade.
Match
Group of answer choices
Investment time horizon
[ Choose
] High
volatility acceptable
Focus on protection
Medium to long time to
invest
Financially secure or experienced
Short to medium time to
invest Low
volatility preferred
Focus on profits
Financially insecure or
beginner
Financial status and experience
[ Choose
] High
volatility acceptable
Focus on protection
Medium to long time to
invest
Financially secure or experienced
Short to medium time to
invest Low
volatility preferred
Focus on profits
Financially insecure or
beginner
Tolerance for price volatility
[ Choose
] High
volatility acceptable
Focus on protection
Medium to long time to
invest
Financially secure or experienced
Short to medium time to
invest Low
volatility preferred
Focus on profits
Financially insecure or
beginner
Capital gains vs. preservation
[ Choose
] High
volatility acceptable
Focus on protection
Medium to long time to
invest
Financially secure or experienced
Short to medium time to
invest Low
volatility preferred
Focus on profits
Financially insecure or
beginner