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A company will need to 'roll over' its existing $234755 funding arrangement in two months' time for a further 180 days. It is concerned that
A company will need to 'roll over' its existing $234755 funding arrangement in two months' time for a further 180 days. It is concerned that interest rates in the short-term debt market may rise in the mean time, and decides to manage the risk exposure by entering into a forward rate agreement with its bank. The bank quotes a price (2Mv8M) of 8.30 to 10. In two months' time the reference rate (BBSW) is 7.3% per annum. Calculate the settlement amount.
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