Why FRA rate afreement 4.82 use what is ?3-7?mean?
Under future why the total basis 1.15 x 2/5 to get the unexpired basis 0.46 2/5 stand for?
Thanks
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Acca dec 2013 q2
11y ago#13 - 7 means that a rate is required for a loan starting in 3 months time and finishing in 7 months time.
We always assume that the basis falls linearly to zero over the life of the future (e.g. a March future finishes at the end of March and so the basis will fall linearly to zero by the end of March).
I think it would be worth your while watching the free lecture on interest rate rise.
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