question archive A company enters into a 3 x 6 FRA with a notional principal of $1 million as the short position
A company enters into a 3 x 6 FRA with a notional principal of $1 million as the short position
Subject:FinancePrice: Bought3
A company enters into a 3 x 6 FRA with a notional principal of $1 million as the short position. The contract has a forward rate of 4%, and LIBOR-90 at FRA expiration equals 5%. At contract settlement, the company will pay:
A. $2,500
B. $2,469.14
C. $9,523.81
