Suppose that a firm wants to lend in 3 months time for a period of 6 months for $1,000,000. The 3-month interest rate is 3% per annum, 6-month interest rate is 5% per annum, and 9-month interest rate is 7% per annum. All rates are continuously compounded. The firm considers using a forward rate agreement (FRA) to hedge its position. Regarding the position, the maturity of the FRA, and the maturity of the loan, which of the following statements is the most accurate?

A. The firm should sell a FRA, the maturity of the FRA is 3 months, and the loan maturity is 6

months.

B. The firm should sell a FRA, the maturity of the FRA is 6 months, and the loan maturity is 3

months.

C. The firm should buy a FRA, the maturity of the FRA is 3 months, and the loan maturity is 6 months.

D. The firm should buy a FRA, the maturity of the FRA is 6 months, and the loan maturity is 3 months.