On January 1st, 2018, Deutsche bank is concerned that 6-month LIBOR will fall below expectations and their $1,000,000 worth of Eurocredit is rolled over at the new lower base rate. The bank is considering to hedge using a FRA with notional amount at $1,000,000, 6% agreement rate, 3 against 9 (180 days) FRA entered into January 1. a. What position should the bank take in the FRA? (2 points) b. How much would the bank pay (or receive) from the FRA counterparty if the settlement rate turns out to be 4%? (2 points) c. How much cash flow will the new Eurocredit (with $1,000,000 plus or minus settlement from FRA) generate after rolling over? (2 points)