About the specs of the ff futures contact

Assignment Help Financial Management

Reference no: EM131962705

On Tuesday, December 16, 2008, at 2:15 pm the FED has announced that the Fed Funds Rate (FFR) is cut by 75 basis points, from 1 percent to 0.25 percent. On the same morning, prior to the announcement, the FFR obtained from the January 2009 futures contract was at 0.21. What was the implied probability of a 75 BP cut vs. a 100 BP cut? To solve this problem you need to learn about the specs of the FF futures contact: specifically how it is settled.

Reference no: EM131962705

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