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Zero rates for 1, 2 and 3 years, expressed with continuous compounding, are 1%, 1.5% and 2% respectively. A forward rate agreement (FRA) gives you

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Zero rates for 1, 2 and 3 years, expressed with continuous compounding, are 1%, 1.5% and 2% respectively. A forward rate agreement (FRA) gives you the night to earn interest for one year at an annually compounded rate of 2.90% on $5 million beginning in two years. What is the value of the FRA to you today? Based on this value are you exposed to credit risk? Why or why not

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