What transfer would take place at the settlement date

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Reference no: EM131883829

In order to hedge their interest rate risk for borrowing beginning 3 months from now ExxonMobil’s treasury department entered into a 3x5 Forward Rate Agreement (FRA) with Barclays with a notional of $100mm where LIBOR plus 50 basis points was the reference rate and the forward rate agreement rate was 7%. If in 3 months, Libor decreased to 4%, what transfer would take place at the settlement date?

Reference no: EM131883829

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