STR Investment Inc. wants to fix the borrowing rate and enters a forward rate agreement (FRA) with HO bank. The information is as below: Expires/settles in 60 days. Notional principal amount is 40million. Market rate is based on 120-day LIBOR. The forward rate is 4%. Assume the actual 120-day LIBOR 60 days from now is 3.5% a. Calculate the cash settlement payment at expiration and identify which party makes the payment. b. What is the type of FRA? (8 marks) (2 marks)