Question: I have this exercise to solve about Forward Rate Agreements (FRA). Anyone could help me to solve it? 1. The 6, 12, 18, and 24

1. The 6, 12, 18, and 24 months rates are 3%, 3.5%,

I have this exercise to solve about Forward Rate Agreements (FRA).

Anyone could help me to solve it?

1. The 6, 12, 18, and 24 months rates are 3%, 3.5%, 3.75%, and 4%, respect- ively. What is the price of the FRA that pays 5% fixed, on a principal of 500,000 for a 6-months period, starting in 18 months? Consider semi-annual compounding.

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