3 . The treasurer of Company A expects to receive a cash inflow of $15 000 090 in 90 days . The treasurer expects short term interest rates to fall during the next 90 days In order to hedge against this risk , the treasurer decides to use an FRA that expires in 90 days and is based on 90 - day LIBOR . The FRA is quoted at 5 percent At expiration LIBOR is 4 5 percent Assume that the national principal on the contract is 515 090 000 A Indicate whether the treasurer should take a long or short position to hedge interest rate risk B . Using the appropriate terminology , identify the type of FRA used here C . Calculate the gain or loss to Company A as a consequence of entering the FRA