You Entered in to a 3*6 Forward Rate Agreement That

question 101

Multiple Choice

You entered in to a 3*6 forward rate agreement that obliged you to borrow $10,000,000 at 3%.Suppose at the maturity of the FRA,the correct interest rate is 3½%.Clearly you are better off since you have the ability to borrow $10,000,000 for 3 months at 3% instead of 3½%.What is the payoff at the maturity of the FRA?

• A)Net payment of $12,391.57 to you
• B)Net payment of $12,500 to you
• C)Net payment of $50,000 to you
• D)Net payment of $48,309.18 to you

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Definitions:

Micro Power

Refers to the localized, often personal, forms of power and influence that operate at the micro-level within societies or institutions.

Macro-level

Pertaining to large-scale structures or processes, often encompassing the entirety of a society or a major component thereof.

Michel Foucault

A French philosopher and historian known for his critical studies of social institutions, including psychiatry, medicine, and the prison system.

Decentering

A conceptual process of shifting away from a Eurocentric or ethnocentric perspective to understand and appreciate diverse cultures, narratives, and histories from their own vantage points.