Level 3: Suppose that you can borrow or lend at the LIBOR rate. In 4 months, you will need to borrow $100,000 for 3 months and want to lock in the rate today. Today's relevant LIBOR rate is 2.2% To lock in this rate, what kind of FRA would you need (i.e. Xv ), and what is its notional value? Would you buy or sell? a. Suppose that you can find an FRA like the one you list in (a) at a quoted rate of 2.5% and you either buy or sell it as you described. In 4 months, the LIBOR rises to 2.4%, what is your payoff from the FRA? b. Combine your profit/loss from the FRA with another loan, and show that this allows you to effectively borrow $100,000 for 3 months at a rate of 2.5%. c