Your company will receive USD10,000,000 in 3 months' time and will keep the funds for a 3-month period to cover a payable 6 months from today. Your analysts think that interest rates may fall from their current level at 6.1% and you want to protect the return you will get until you need the funds. BNP-Paribas, a French bank, offers a FRA with an interest rate of 6% to cover the extra funds for the 3-month period that begins 3 months from today. Your company decides to take the FRA offer from BNP-Paribas.

In the above case, your company would be the ____________(Options: Intermediary, Seller, Buyer) of the FRA and BNP-Paribas would be the ________________(Options: Intermediary, Seller, Buyer) of the FRA.

If interest rates 3 months from now are at 6.1%, the value of the FRA amount to be transferred will be USD _________ and your company will ______________ (Options: lend, borrow, receive, pay, ignore) this difference to bring your return__________ (Options: below, move up, move down to, above, stay up) the agreement rate of 6%.

If interest rates 3 months from now are at 5.2%, the value of the FRA amount to be transferred will be USD ________and your company will_________ this difference to bring your return____________ (Options: below, move up, move down to, above, stay up)

the agreement rate of 6%..

If interest rates 3 months from now are at 6.0%, the value of the FRA amount to be transferred will be USD ________and your company will ____________ this difference to bring your return (Options: below, move up, move down to, above, stay up) the agreement rate of 6%.

Answer rating: 100% (QA)

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