• What type of futures contracts are Eurodollars and LIBOR?

• The largest financial futures markets are:

• T-bill
• T-bond
• Eurodollar
• LIBOR
• MuniBond
• Federal Funds

A. Eurodollar Futures

*Defined:

• Euro$ futures were first offered by the CME in 19___. Since then, they have become the global barometer of short-term interest rates and are among the world's most actively traded.

Note the following characteristics:

1.Eurodollar futures allow a ____ month rate to be locked in.

2. Eurodollar futures are priced:

3. Eurodollar futures trade on the _______ cycle.

4. The minimum par for Eurodollar futures is $_____.

5. Eurodollar futures contracts are settled in ______.

6. The tick is $______.

7. Eurodollar contracts exhibit an _______ relationship to changes in yields.

• Defined:

• The CME began trading LIBOR 1 month futures contracts in 19___. Using one month LIBOR contracts allows fixed income managers, who face more frequent and shorter interest rate pricing intervals, to "fine tune" their risk management practices.

• Distinguished from a Eurodollar futures:

1. LIBOR futures allow a ________month rate to be locked in.

2. LIBOR futures are priced:

3. LIBOR futures offer delivery in ______.

4. LIBOR futures par is $_______.

5. LIBOR contracts are settled ______.

6. The tick is $______.

7. LIBOR contracts exhibit an ______ relationship to changes in yields.