ABC Corp goes long a 12x24 FRA with a fixed rate of 4% and a notional principal

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ABC Corp goes long a 12x24 FRA with a fixed rate of 4% and a notional principal of $100. The floating rate on the contract is 12-month LIBOR. In 12 months, the LIBOR rate is 2.5%.

What will the settlement cash flow be on the FRA in 24 months?

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Introduction To Corporate Finance

ISBN: 9781118300763

3rd Edition

Authors: Laurence Booth, Sean Cleary

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Posted Date: Jun 09, 2023 02:10 AM

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ABC Corp goes long a 12x24 FRA with a fixed rate of 4% and a notional principal

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To calculate the settlement cash flow on the FRA in 24 months we need to det... View the full answer

Introduction To Corporate Finance

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