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QUESTION
Dealer quotes a rate of 5% on this FRA and the end user agrees. The expiration date is in 90 days. The notional amount is $3,000,000. The underlying...
Dealer quotes a rate of 5% on this FRA and the end user agrees. The expiration date is in 90 days. The notional amount is $3,000,000. The underlying interest is the 180 LIBOR time deposit. In 90 days the 180-day LIBOR is at 4%. What is the quote? What is the cash settlement payment at expiration and what party pays the other party?
