Use the Following Information to Answer Questions 22 Through 24

question 18

Multiple Choice

Use the following information to answer questions 22 through 24.On October 1,the one-month LIBOR rate is 4.50 percent and the two month LIBOR rate is 5.00 percent.The November Fed funds futures is quoted at 94.50.The contract size is $5,000,000.
-The dollar value of a one basis point rise in the Fed funds futures price is

• A)-$25.00
• B)$41.67
• C)$5,000
• D)$25.00
• E)none of the above

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Definitions:

Profitability Ratios

Financial metrics used to assess a business's ability to generate earnings relative to its revenue, operating costs, balance sheet assets, or shareholders' equity.

Operating Effectiveness

A measure of how well an organization is managing its core business functions to achieve its objectives efficiently and effectively.

Percentage Increase

The amount of increase in a value or quantity, expressed as a percentage of its original value.

Sales

The exchange of goods or services for money, recognized as revenue by businesses.