(4 points) A company enters a LIBOR forward rate agreement with a bank to borrow $1 million in 6 months for a period of 12 months. The current 6-month and 18-month LIBOR rates are 1.6% and 2% per year, respectively (continuous compounding). What rate should be agreed on for the FRA to be zero cost? Suppose in 6 months, 12-month LIBOR rate and 12-month risk free interest rate turn out to be 2.4% and 2.0% per year, respectively. The company and the bank decide to settle at this time. How can the FRA be settled? (4 points) A company enters a LIBOR forward rate agreement with a bank to borrow $1 million in 6 months for a period of 12 months. The current 6-month and 18-month LIBOR rates are 1.6% and 2% per year, respectively (continuous compounding). What rate should be agreed on for the FRA to be zero cost? Suppose in 6 months, 12-month LIBOR rate and 12-month risk free interest rate turn out to be 2.4% and 2.0% per year, respectively. The company and the bank decide to settle at this time. How can the FRA be settled