The chart below shows four series. Please ignore the Latest Market Pricing and the m forecast series (I didn't have the ability to recreate the chart without those two series). Focusing on the other two: . The "Effective Fed funds rate" is the policy interest rate set by the Federal Reserve, that is, it is the overnight rate at which banks lend to 39mm will be close to the deposit rates on investor could get at a U.S. bank. . The Historical pricing chart shows a series of marketbased forecasts of what the Fed funds rate would be looking forward. Each line (which looks like a loose strand of hair attached to the Effective Fed Funds rate) is a market forecast for the Fed funds rate over the subsequent two years or so at a given point in time. Each point where a \"strand of hair\" meets the Effective Fed Funds rate shows the date at which the predictions were made. As you can see, starting in about 2007 when the GFC (see footnote) started, and all the way to 2016, the market continually forecasted that the Fed funds rate would be higher going forward than it actually was (the Fed kept rates at 0 from the end of 2008 until almost the end of 2015).1 Exhibit: Fed funds rate. historical forward pricing and BofA forecast (Va) L'z'e think markets are underpricing Fed hikes in 2022 and 2023 B [ ftecmle ted tmds rate Both. forecast 5 ' latoslrrmu21ptting \"Stencil pncrg 4 3 2 f1} / 0 _-_ w-J' -* __ 2C04 III) me 2010 2012 20H 2016 2018 2020 2022 Sou rce:BofA Global Research. Bloomberg BCfA SEC-SAL RESE' RCH Now suppose you had perfect foresight and knew that the market predictions for the Fed funds rate going forward would be continually too high for the period from 2007 through 2016. Might you have a profitable carry trade opportunity? Explain