Questions 1 The yield curve is flat at 6% per annum.

Questions 1

The yield curve is flat at 6% per annum. What is the value of a Forward Rate Agreement where the holder receives interest at the rate of 8% per annum for a six-month period on a principal of $1,000 starting in two years?  All rates are compounded semi-annually. Explain your answer. (3 marks)