You bought a USD 4,000000 6x9 FRA at 6.75%. The settlement rate is 3-month (90-day) BBA LIBOR, which is fixed at 5.50%. What is the settlement amount at maturity?

The correct answer is B. You pay USD 12,330.46. See the full explanation below for the reasoning.

Question

Options

AYou receive USD 12,330.46
BYou pay USD 12,330.46
CYou pay USD 12,163.81
DYou receive USD 12,163.81

How the community answered

(32 responses)

A
6% (2)
B
78% (25)
C
3% (1)
D
13% (4)

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