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If the Fed Funds Futures prices were as follows: Current Month 97.50 Six months ahead 97.00 - Calculate the current Fed Funds Interest Rate -

If the Fed Funds Futures prices were as follows:

Current Month 97.50

Six months ahead 97.00

- Calculate the current Fed Funds Interest Rate

- Based on these prices, describe what the market thinks will happen to interest rates over the next six months. Why?

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