Question 4 1 pts The fixed rate on a 0x3 FRA is 2.5% and the fixed rate on a 3x6 FRA is 3.0%. In both FRA's the floating rate is 3-month LIBOR. The fixed rate on six-month, quarterly settlement interest rate swap on 3-month LIBOR is 2%. Is there an arbitrage opportunity? If yes, then how to capture the arbitrage profits? No, there is no arbitrage opportunity. Yes, there is an arbitrage opportunity. You would need to short the swap and go long the 0x3 and 0x6 FRA's. Yes, there is an arbitrage opportunity. You would need to long the swap and go short the 0x3 and 0x6 FRA's. ONeed more information.