Question: compounded) for 3 months starting in 0.5 years on a principal of $200 million with a floating rate tied to the rates observed below. Consider

compounded) for 3 months starting in 0.5 years on a principal of $200 million with a floating rate tied to the rates observed below. Consider the following annual interest rates: Risk-free 3-month Maturity spot rate forward rate (years) (with continous (with quarterly compounding) compounding) 0.25 0.039 0.5 0.04 0.0412 0.75 0.046 0.0584 1 0.049 0.0584 Ex: the 3-month forward rate from 0.5 to 0.75 is 0.0584 % Note: You can actually calculate the 3-month forward rates from the spot rates - column 3 should just save you some time but you may want to calculate them on your own Part 1 I Attempt 3/4 for 10 pts. What is the value of the FRA to the receiver of the 4.5% (in $) (pays the floating rate)? 0+ decimals Submit

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