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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