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Calculate the value of the fra at maturity

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Reference no: EM132620265

Calculate the price of a 3 x 5 FRA (i.e., a 60-day loan, 90 days from now). The current 90-day LIBOR is 5% and the 150-day LIBOR is 6%. Let's assume a notional principal of $10 million and that, at contract expiration, the 60-day rate has increased to 7%. Calculate the value of the FRA at maturity, which is equal to the cash payment at settlement.

Reference no: EM132620265

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