Hanig Bottle Company wants to borrow $20M three months from today for a 9 month period. Hanig wants to protect against interest rate risk by entering into a 3x9 forward rate agreement (FRA) at 3.25%. In 3 months, the interest rates are 2.5%.

		Hanig receives $112,500 from the FRA.
		Hanig allows the FRA to expire unused.
		Hanig receives $150,000 from the FRA
		Hanig pays $112,500 on the FRA.