Question: 13. The manager also asks you to value a 5.87% 1 x 4 FRA with a notional principal is $2 million twenty days after initiation.

13. The manager also asks you to value a 5.87% 1 x 4 FRA with a notional principal is $2 million twenty days after initiation. Based on information from Bloomberg, 10-day LIBOR is 4.2%, 30-day LIBOR is 5%, 100-day LIBOR is 6% and 120-day LIBOR is 7%. What is the value of the FRA? Round to the nearest dollar

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