An FRA trader entered into an FRA agreement in which he will pay 6%(assuming quarterly compounding) between 3 months and 6 months. The principal for the trade is $3 million. The 6 month LIBOR spot rate is 5.8%. If the trader had a gain of $2550 at the end of the period, The 3 month LIBOR rate would be?
A. 5.30%
B. 6.30%
C. 5.25%
D. 2.51%
The correct answer is A. how do we get there??????????????????
A. 5.30%
B. 6.30%
C. 5.25%
D. 2.51%
The correct answer is A. how do we get there??????????????????