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The yield curve is flat at 6% per annum. What is the value of an FRA where the holder receives interest at the rate of
The yield curve is flat at 6% per annum. What is the value of an FRA 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 semiannually.
a. $8.63
b. $9.02
c. $8.88
d. $9.12
The yield curve is flat at 6% per annum. What is the value of an FRA 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 semiannually.
| a. | $8.63 | |
| b. | $9.02 | |
| c. | $8.88 | |
| d. | $9.12 |
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