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Today is July 14, 2021 and an investor enters into a FRA in which she will pay 8% per year for a three month period

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Today is July 14, 2021 and an investor enters into a FRA in which she will pay 8% per year for a three month period starting on April 14, 2022 on a principal of $1,000,000. On Dec 14, 2021, the forward rate for the three month period starting on April 14, 2022 is 7.6% and the risk free spot rate for April 12, 2022 is 7%. What is the value of the FRA for the investor on Dec 14, 2021? All the rates presented in this problem are in continuous compounding. (10 points)

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