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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