Suppose that you enter into an FRA that is designed to ensure you will receive a fixed rate of 5% on a principal of $100 million for a six-month period starting in two years. If three-month LIBOR proves to be 5.5% for the six-month period, what is the cash flow that is settled at the two-year point? Would this be a cash inflow or an outflow to you at the two-year point?

*note: all interest rates here are expressed with semi-annual compounding

		-$243,309; cash outflow
		-$250,000; cash outflow
		$250,000; cash inflow
		$243,309; cash inflow