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A three-against-six forward rate agreement (FRA) has an agreement rate of 4.75% LIBOR. You believe the three-month LIBOR interest rate will decrease to 4.50% within
A three-against-six forward rate agreement (FRA) has an agreement rate of 4.75% LIBOR. You believe the three-month LIBOR interest rate will decrease to 4.50% within the next three months. You decide to take a speculative position in the FRA with a $1,000,000 notional value. There are 92 days in the FRA period.
Do you agree that the correct option is to sell the FRA?
True
False
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