I couldn’t understand the computing process in the example given in the text book Volume 5 Page 187 example 2.
brief as follows:
Eurodollar future prices on the date are 96.09 96.13 for June and September.
Gold future price on the date for June and December are 265.7 269 respectively,
and it asks you to calculate the 6-month lease rate.
The answer is calculating June to September 3-month LIBOR as (100-96.09)/400*(91/90)
My question is why 400 is divided and why (91/90)?