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In six months you want to borrow ten million dollars for a short period of two months, using a 60-day LIBOR rate. Since the LIBOR

In six months you want to borrow ten million dollars for a short period of two months, using a 60-day LIBOR rate. Since the LIBOR rate a year from now is unknown today, you are thinking of hedging that with an FRA. Suppose that the forward rate is 4.2% today but at expiration of the FRA, the LIBOR spot rate is 4%. What gain or loss do you get from the FRA?

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