A $100 Notional 6×12 FRA Has the Following Features at Inception.The

question 1

Multiple Choice

A $100 notional 6×12 FRA has the following features at inception.The first six month period is 182 days and the second is 183 days.The locked-in rate on the FRA is 6%.After one month the 5×11 FRA is trading at a fair strike of 6.2% with 151 days in the first five month period.What is the value of the FRA to the buyer if the five-month Libor rate at this point is is 5%?

• A)+0.0965
• B)-0.0965
• C) \(+ 0.0986\)
• D)-0.0986

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Definitions:

Homophobia

Prejudice or discrimination against individuals based on their real or perceived homosexuality.

Heterosexism

A system of attitudes, bias, and discrimination in favor of opposite-sex sexuality and relationships.

Transphobia

The fear, hatred, disbelief, or mistrust towards trans individuals or those who do not conform to societal gender norms.

Transitioning

The process of changing from one state, condition, or activity to another; frequently used in the context of gender, describing the process someone undergoes to live as their self-identified gender.