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Forward rate agreement

Aannette7y ago
Dear sir, If the FRA is mentioned as 5.2-5.3. why do we choose 5.3? why is the 5.2 given? Thankyou
John MoffatJohn MoffatTutor7y ago#1
It would help if you wrote the whole question!!! There are two rates quoted - interest received on deposits and interest paid on borrowings. If you are borrowing money, then it is obviously the higher rate (5.3%) that would be relevant. If you are depositing money then it would be the lower rate (5.2%).
Aannette7y ago#2
Yes we are borrowing. Thank you!
John MoffatJohn MoffatTutor7y ago#3
You are welcome :-)
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