An agent wants to lend $100000 in 3 month over 6 month. To hedge his position against adverse evolution of interest rate, he entered into FRA contract at FRA rate 1.50% (simple IR).

At settlement date, the observed 6 month Libor was 1.75%. The exchanged amount and the direction of payment are:which one?

a. The speculator receives 245.70 from the counterpart

b. The speculator pays 245.70 to the counterpart

c. The speculator pays 123.92 to the counterpart

d. The speculator receives 123.92 from the counterpart

e. The speculator receives 124.22 from the counterpart

f. The speculator pays 124.22 to the counterpart

g. None of them