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Question 7 1 pts You borrow money from a company. With a FRA made at time 0 , you lock in an interest rate of

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Question 7 1 pts You borrow money from a company. With a FRA made at time 0 , you lock in an interest rate of 6% to be paid at a future date, time 1 . At time 1, the spot interest rate has increased to 8%. Will the company you borrow from have a gain or loss and why? Loss, even though you have a FRA, you will have to pay the 8% interest Loss, you're protected by the FRA, the company could have made more in interest from you but you only have to paid the agreed interest of 6% Gain, since the interest rate increased now you have to pay 8% Gain, they could just sell another FRA to you for the new interest rate

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