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Consider a Forward Rate Agreement (FRA) in which a trader will pay a rate of interest of 5% per annum with quarterly compounding and receive

Consider a Forward Rate Agreement (FRA) in which a trader will pay a rate of interest of 5% per annum with quarterly compounding and receive LIBOR on a principal of $1 million for the three-month period starting on December 30. Suppose that on December 30 the three-month LIBOR proves to be 5.4% per annum with quarterly compounding. What is the cash flow for the trader?

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