1. An investor is looking into a six-month forward rate agreement (FRA) with the notional principal of $1,000,000 for a loan period of three months. The investor is trying to figure out the xed rate specified in the FRA, and the amount of interest saVings at the loan expiry date. Assuming that after six months, the market rate for this loan is 9%; and that the market today shows that the three-month rate is 3% per annum, the six-month rate is 5% per annum, and the nine-month rate is 6% per annum (all rates are continuously compounded). Which of the following options is the most accurate? The rate specified in the FRA The amount of cash settlement at loan expiry date ($) A. 7.0% 2,444.38 B. 7.0% 2,500.00 C. 8.0% 2,444.38 D. 8.0% 2,500.00