A firm sells a three against six FRA at 2.50% (annualized) with the notional principal of $2
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Question:
A firm sells a “three against six” FRA at 2.50% (annualized) with the notional principal of $2 million. At maturity the interest rate in the market is 2.00%. How much is the firm cash settlement for the FRA? (Assume dtm is 91 days.)
Related Book For
International Financial Management
ISBN: 978-0078034657
6th Edition
Authors: Cheol S. Eun, Bruce G.Resnick
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