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The yield curve is flat at 6% per annum. What is the value of a Forward Rate Agreement where the holder receives interest at the
The yield curve is flat at 6% per annum. What is the value of a Forward Rate Agreement where the holder receives interest at the rate of 8% per annum for a six-month period on a principal of $1,000 starting in two years? All rates are compounded semi-annually. Explain your answer. (3 marks)
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