What is the effective rate

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Reference no: EM133925823

Problem

Fratton will need to sell three-month £ interest rate futures contracts. (b) Fratton will need to sell five contracts (2,500,000/500,000 3/3) Sell at 97.20 and buy at 97.00 for a gain of 0.20%. Get the instant assignment help. Futures outcome: 0.20% 500,000 3/12 5 = £1,250 Payment in the spot market: 2,500,000 3% 3/12 = £18,750 - £1,250 = £17,500 . What is the effective rate?

Reference no: EM133925823

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