Eurodollar futures contract expiring in 3-month is currently trading at 98.00. What is the implied short-term interest rate at the futures expiration?

Group of answer choices

None of these

2.00%

3.00%

1.00%

If the current short-term interest rate is 1% less than the implied future rate, what is the contract telling you in regard to investors' expectations for future changes in monetary policy?

Group of answer choices

Monetary policy may loosen.

Monetary policy may tighten.

Not enough information to answer.

A new client is a regional manager at a multi-national company. He is hiring you to manage his assets until he retires in 4 years. You and the client agree his primary investment objective is preserving purchasing power while limiting volatility, so default risk and interest rate risk need to be carefully managed. The client is willing to take some credit risk in pursuit of modest capital gains, but he expects you to diversify as much as possible and track the Barclays Aggregate Bond index fairly closely. His salary is generous, so tax-advantaged securities are preferred. International securities are allowed if the credit rating is investment grade.

Match

Group of answer choices

Investment time horizon

[ Choose ] High volatility acceptable Focus on protection Medium to long time to invest Financially secure or experienced Short to medium time to invest Low volatility preferred Focus on profits Financially insecure or beginner

Financial status and experience

[ Choose ] High volatility acceptable Focus on protection Medium to long time to invest Financially secure or experienced Short to medium time to invest Low volatility preferred Focus on profits Financially insecure or beginner

Tolerance for price volatility

[ Choose ] High volatility acceptable Focus on protection Medium to long time to invest Financially secure or experienced Short to medium time to invest Low volatility preferred Focus on profits Financially insecure or beginner

Capital gains vs. preservation

[ Choose ] High volatility acceptable Focus on protection Medium to long time to invest Financially secure or experienced Short to medium time to invest Low volatility preferred Focus on profits Financially insecure or beginner