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The yield curve is flat at 8.6% per annum. What is the value of an FRA where the holder receives interest at the rate of
The yield curve is flat at 8.6% per annum. What is the value of an FRA where the holder receives interest at the rate of 6.5% per annum for a six-month period on a principal of $1,000 starting in two years and pays a variable rate based on the yield rates? All rates are compounded semiannually.
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