# Question

Using the same information as the previous problem, suppose the interest rate on the borrowing date is 7.5%. Determine the dollar settlement of the FRA assuming

a. Settlement occurs on the date the loan is initiated.

b. Settlement occurs on the date the loan is repaid.

Use the following zero-coupon bond prices to answer the next three questions:

Days to Zero-Coupon

Maturity Bond Price

90........ 0.99009

180........ 0.97943

270 ........ 0.96525

360 ........ 0.95238

a. Settlement occurs on the date the loan is initiated.

b. Settlement occurs on the date the loan is repaid.

Use the following zero-coupon bond prices to answer the next three questions:

Days to Zero-Coupon

Maturity Bond Price

90........ 0.99009

180........ 0.97943

270 ........ 0.96525

360 ........ 0.95238

## Answer to relevant Questions

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