It is 30 June. Greg plc will need a $10 million 6 month fixed rate loan from
1 October. Greg wants to hedge using a forward rate agreement (FRA).
The relevant FRA rate is 6% on 30 June.
What is the interest payable/receivable via the FRA contract if in 6
months' time the market rate is 9%?
A $150,000 receivable
B $150,000 payable
C $450,000 receivable
D $450,000 payable
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Option D-$450 is correct
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