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Question 14 Incorrect To finance your (expensive) studies, you enter into a forward rate agreement (FRA) with a cash settlement at maturity. You borrow $4.9 million in 3 months time, and intend to borrow for 10 months. Mark 0.00 out of 1.00 Flag question You know you can secure a FRA rate of 5.57% and the relevant reference rate is the LIBOR rate for the borrowing period as at the commencement of the borrowing period. The current 3 month LIBOR is 6.57% and the 13 month LIBOR is 7.07%. In 3 months, you observe that the 3 month LIBOR rate is 5.8485% and the 10 month LIBOR rate is 6.9625%. Assuming 12 months in a year and each month is an equal proportion of the year, what is the cash settlement? Select one: a. 0.053742 million b. 0.016766 million c. 0.054338 million d. Not enough information e. 0.076412 million Of. 0.010748 million X The correct answer is: 0.053742 million Question 14 Incorrect To finance your (expensive) studies, you enter into a forward rate agreement (FRA) with a cash settlement at maturity. You borrow $4.9 million in 3 months time, and intend to borrow for 10 months. Mark 0.00 out of 1.00 Flag question You know you can secure a FRA rate of 5.57% and the relevant reference rate is the LIBOR rate for the borrowing period as at the commencement of the borrowing period. The current 3 month LIBOR is 6.57% and the 13 month LIBOR is 7.07%. In 3 months, you observe that the 3 month LIBOR rate is 5.8485% and the 10 month LIBOR rate is 6.9625%. Assuming 12 months in a year and each month is an equal proportion of the year, what is the cash settlement? Select one: a. 0.053742 million b. 0.016766 million c. 0.054338 million d. Not enough information e. 0.076412 million Of. 0.010748 million X The correct answer is: 0.053742 million