Futures Contracts on 90-Day U

Multiple Choice

Futures contracts on 90-day U.S. Treasury bills for delivery in 3 months carried a yield today of 10.25 percent while futures contracts on comparable T-bills for delivery in 6 months carried a yield of 10.625 percent. Today's yields on 90-day bills for immediate (cash) delivery are 10.12 percent. The implied market forecast is that interest rates will:

A) Rise between today and 6 months from today
B) Fall for the next 3 months, but rise thereafter
C) Rise over the next 6 months
D) Fall over the next 6 months
E) None of the above