Question

1. You went long a December Eurodollar futures contract yesterday at 98.10. Today that contract is trading at 98.00.
   1. What is the current interest rate on the Eurodollar futures?
2. 2. What is the current price today of the Eurodollar futures?
3. 3. How much has the value of the Eurodollar futures contract that you purchased changed since you purchased it? (Be sure to include if positive or negative).

Answer 1

1st the contract yesterday was at 98.10

Now today the contractis trading at 98.00

The current intrest rate on the Eurodollor futures

the formula is RATE=100- QUOTE=100 - 98.10=1.90%

The current price today of the Eurodollar Future=98.00

The change in value

Here, 1 basis point=.01%=$25

so 1st rate =1.90%

and second rate=100- present vale =100-98.00=2 %

so the change in basis =2.00% - 1.90 %= 0.10= 10 basis point

So the change in the value of Eurodollar Future =10* $25 =$250