Assume the Following Terms for an FRA: Reference Rate Is

question 17

Multiple Choice

Assume the following terms for an FRA: Reference rate is three-month LIBOR, the contract rate is 5.5%, the notional amount is for $10 million, and the number of days to settlement is 91 days. If the settlement rate is 6.25%, what is interest differential?

• A) $17,489
• B) $18,168
• C) $18,531
• D) $18,958

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Definitions:

Contentious

Contentious involves being prone to arguments, disputes, or conflict, often marked by heated disagreements.

Empowerment

The process of increasing the capacity of individuals or groups to make choices and transform those choices into desired actions and outcomes.

Competency

It refers to the ability or skill to perform a task successfully or efficiently.

Positive Reinforcement

The addition of a rewarding stimulus following a desired behavior, encouraging its future occurrence.