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Find the rate on a pure discount loan hedged with a long FRA if the loan is for $10 million and matures in 30 days, the FRA is 30-day LIBOR, the fixed rate on the FRA is 4 percent, and LIBOR at the time the loan is taken out is 5 percent.

1. 4.87 percent

2. 0.25 percent

3. 5.18 percent

4. 4.13 percent

5. 2.04 percent

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91549071

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