Find the Approximate Market Value of a Long Position in an FRA

question 36

Multiple Choice

Find the approximate market value of a long position in an FRA at a fixed rate of 5 percent in which the contract expires in 20 days,the underlying is 180-day LIBOR,the notional principal is $25 million,the 20-day rate is 7 percent,and the 200-day rate is 8.5 percent.

• A)$433,658
• B)-$454,954
• C)$322,819
• D)-$322,819
• E)$454,954

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Definitions:

DNA Evidence

Genetic material used in courts or investigations to prove the presence or absence of an individual at a crime scene, or to establish paternity or other relationships.

Protists

The group of eukaryotic organisms that are not a plant, fungus, or animal. Protists are generally a microscopic, complex single cell; they evolved before other types of eukaryotes in the history of Earth.

Common Ancestor

The most recent individual from which all organisms in a group are directly descended.

Green Algae

Members of a diverse group of photosynthetic protists; contain chlorophylls a and b and have other biochemical characteristics like those of plants.