The price of a short-term interest rate risk contract is generally derived from:
A) traded equity prices.
B) the money market instruments.
C) an underlying FX contract.
D) commodities.

Question

Quizplus · Accepted Answer

Short-term interest rate risk contracts are typically based on money market instruments such as Treasury bills, commercial paper, and certificates of deposit. Therefore, the price of these contracts is derived from the performance of these instruments in the financial markets.

The Price of a Short-Term Interest Rate Risk Contract Is