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Calculate the settlement amount

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Reference no: EM133377624

Question: Company XYZ will need to borrow GHS50m in 6mths time for a period of 6months (183days). The bank that has approved the loan facility for XYZ is not willing to quote a fixed interest rate and grants the facility based on whatever its base rate turn out to be plus 2% margin. Concerned that the rates will go up in the next 6mths, company XYZ buys FRA at a price of 25% for a notional GHS50m. 6 months later, the bank's base rate is 26% and the company borrows at the bank's base rate plus 2%. Calculate the settlement amount

Reference no: EM133377624

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