Suppose you have agreed to take a short-term loan amounting of $2,000,000 from your banker. The loan
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Question:
(a) Should you take a long or short position for the FRA? Justify.
(b) Determine the effective cost of borrowing per annum if the 6-month LIBOR at the fixing day is 6.5% with the 30/360 days convention.
Related Book For
Business Math
ISBN: 978-0133011203
10th edition
Authors: Cheryl Cleaves, Margie Hobbs, Jeffrey Noble
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