Three against nine floating rate agreement

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Reference no: EM131912057

A “three against nine” floating rate agreement (FRA) has an agreement rate of 5.50%. You believe that six-month LIBOR will be 5.20% in three months. You decided to speculate using a FRA with a $5,000,000 notional amount. Determine whether you should buy or sell the FRA and also compute your expected dollar profit.

Reference no: EM131912057

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