78 Suppose that in orde to hedg nerest rae risk on your borrowing, you enter into an Suppose that in order to hedge interest rate risk on your borrowing FRA that will guarantee a 6 On the date you borrow the $500,000.00, the actual interest rate is 5%. Det the dollar settlement of the FRA assuming % effective annual interest rate for 1 year on $500,000.00. ermine a. Settlement occurs on the date the loan is initiated. h. Settlement occurs on the date the loan is repaid. sing the same information as the previous problem, suppose the interest rate on the borrowing date is 7.5%. Determine the dollar settlement of the FRA assuming a. Settlement occurs on the date the loan is initiated. b. Settlement occurs on the date the loan is repaid