You Bought a USD 4,000,000 6x9 FRA at 6

question 49

Multiple Choice

You bought a USD 4,000,000 6x9 FRA at 6.75%. The settlement rate is 3-month (90-day) BBA LIBOR, which is fixed at 5.50%. What is the settlement amount at maturity?

• A) You receive USD 12,330.46
• B) You pay USD 12,330.46
• C) You pay USD 12,163.81
• D) You receive USD 12,163.81

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Definitions:

Shaping

A method used in behavior therapy and training that involves reinforcing successive approximations of a target behavior until the desired behavior is achieved.

Spontaneous Recovery

A phenomenon in psychology where a previously extinguished response re-emerges after a period of no exposure to the conditioned stimulus.

Positive Reinforcer

An event or item that, when presented after a behavior, increases the likelihood of that behavior occurring again.

Negative Reinforcer

A stimulus whose removal after a particular behavior increases the likelihood of that behavior occurring again in the future.