Consider a 6*12 FRA on 6-month Euribor and the current term structure of interest rate:

Maturity(year)	0.5	1	1.5	2
Yield Zero coupon	4.00%	4.20%	4.30%	4.37%

Calculate the fixed rate of FRA. Explain the underlying logic.

A corporate treasure wishes to hedge against an increase in future borrowing costs due to a possible rise in short-term interest rate. What position should he take (long or short) on this 6*12 FRA? Why?