Question: Use the rates in Problem 4.14 to value an FRA where you will pay 5% for the third year on $1 million. In problem 4.14

Use the rates in Problem 4.14 to value an FRA where you will pay 5% for the third year on $1 million.
In problem 4.14
Maturity( years) Rate (% per annum)
1 ……………………………………. 2.0
2 ……………………………………. 3.0
3 ……………………………………. 3.7
4 ……………………………………. 4.2
5 ……………………………………. 4.5

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