Suppose that the six-month rate is 5% per annum and the nine-month rate is 6% per annum with continuously compounded compounding.

a) What is the 3-month forward rate starting in 6-month time?

b) If an investor buys a 6-month FRA for a 3-month loan with the notional principal of $1,000,000, what should be the fixed borrowing rate?

c) Suppose that after 6 months, the market rate for a $1,000,000 loan with a maturity of 3 months is 9% per annum (with quarterly compounding). What is the amount of cash settlement that the investor pays/receives according to this FRA?

Suppose that the six-month rate is \5 per annum and the nine-month rate is \6 per annum with continuously compounded compounding. a) What is the 3-month forward rate starting in 6-month time? b) If an investor buys a 6-month FRA for a 3-month loan with the notional principal of \\( \\$ 1,000,000 \\), what should be the fixed borrowing rate? c) Suppose that after 6 months, the market rate for a \\( \\$ 1,000,000 \\) loan with a maturity of 3 months is \9 per annum (with quarterly compounding). What is the amount of cash settlement that the investor pays/receives according to this FRA