Suppose That in June, When the 90-Day BBSW Is 5

question 48

Multiple Choice

Suppose that in June, when the 90-day BBSW is 5%, the prices for the September and December BAB futures contracts are 95.10 and 95.15, respectively.

• A)The 180-day rate will be 4.85%.
• B)The 90-day rate is expected to be 4.90% in September.
• C)The 180-day rate will be 4.95%.
• D)The futures market expects the RBA will cut the cash rate by 25 basis points in September.
• E)There would be a normal yield curve in the money market.

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Definitions:

Merchandising Company

A business that purchases finished goods for resale, making profit primarily through the markup of these goods.

Income Summary Account

An account used temporarily during the closing process to summarize a period's revenues and expenses before determining net income.

Determination Of Income

The process of calculating the income of a business or individual, considering all sources of revenue and applicable expenses.

Nonoperating Activities

Transactions or events that fall outside the primary operations of a business, impacting the firm's financials but not related to its core operations.