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A few months ago, a trader entered into a Forward Rate Agreement(FRA) in which it...

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Accounting

A few months ago, a trader entered into a Forward Rate Agreement(FRA) in which it agreed to pay a fixed rate of interest equal to 4%. The notional size of the FRA is $50,000,000. The FRA will start in four months and last for three months. Using the information below, find the value of the FRA from the perspective of the trader.image

Month Spot Zero Rate(%) Based on continuous compounding 2.0 12 2 2.02 32 3.02 42 3.0 52 4.02 be 4.02 7 5.04

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