Which of the Following Is True

question 20

Multiple Choice

Which of the following is true?

• A) The futures rates calculated from a Eurodollar futures quote are always less than the corresponding forward rate
• B) The futures rates calculated from a Eurodollar futures quote are always greater than the corresponding forward rate
• C) The futures rates calculated from a Eurodollar futures quote should equal the corresponding forward rate
• D) The futures rates calculated from a Eurodollar futures quote are sometimes greater than and sometimes less than the corresponding forward rate

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Definitions:

Pretax Income

The amount of income a company generates before any taxes are deducted, also known as earnings before taxes (EBT).