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for example. when a bank or a treasurer offer 3v6 FRA, what period should be used in order to determine payment/receipt on the FRA, is it 3months or 6months?
A 3v6 FRA is for a deposit or borrowing that will start in 3 months and will end in 6 months.The interest itself will be payable of receivable in 6 months time (at the end of the deposit or loan) but the settling up with the bank on the FRA will be in 3 months time (at the start of the deposit or loan) because this is when the actual interest rate applying will be known.
I do explain this in my free lectures on interest rate risk management.
The lectures are a complete free course for Paper FM and cover everything needed to be able to pass the exam well.