In February of 2018 you entered into a forward rate agreement. According to the forward rate agreement,
Fantastic news! We've Found the answer you've been seeking!
Question:
In February of 2018 you entered into a forward rate agreement. According to the forward rate agreement, you will borrow $2 million at a continuously-compounded interest rate of 3.45%, with the loan to be taken in February of 2020 and repaid in February of 2023. In February 2019 the continuously-compounded zero rate for a bond maturing in February 2023 is 2.4% and the continuously-compounded forward rate for a loan to be made in February of 2020 and repaid in February 2023 is 3.05%. What is the value to you, in February 2019, of your forward rate agreement? Round all intermediate calculations to six decimal points.
1) -$24,036
2) $37,462
3) -$37,462
4) $0
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
8th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date: