XYZ Industries approaches a bank to hedge its interest rate risk of a bill facility for June
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Question:
XYZ Industries approaches a bank to hedge its interest rate risk of a bill facility for June (90 days from today). Assume the following for your calculations: The 90-day FRAs currently have an agreed rate of 4.30% for June The 90-day BBSW in June is 4.00% Calculate the effective interest rate (in percentage) established for the duration of the 90-day bill facility, through the use of an FRA contract. Round your final answer to 2 decimal places.
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