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a)A forward rate agreement (FRA) specifies the contract interest rate at 8% on a principal of $5 million for a 6-month period starting in 5

a)A forward rate agreement (FRA) specifies the contract interest rate at 8% on a principal of $5 million for a 6-month period starting in 5 years.Given the 5-year zero rate is 10% and 5.5-year zero rate, 11%, please estimate the price of FRA.

Theoretically, once a trader enters into a FRA, the interest locked at the forward rate.Do you agree? Please prove your answer.

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