Is john correct that these trades are identical

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Reference no: EM133059694

Consider the following conversation:

John: "I'm looking to buy $25 million notional 9 x 12 FRA. The FRA rate is currently at 4%, and I'm sure the forward rates will rise."

Sally: "You could trade ED Futures instead."

John: "Yes, I suppose I could, but they are exactly the same anyway. I like FRAs since I can by them from my friend at RBC." There are several things about this conversation we can explore.

(a) What explicit trade in the ED futures market would accomplish what John wants?

(b) Is John correct that these trades are identical? If not, in what ways are they different?

Reference no: EM133059694

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