Saturday, April 9, 2011

FRA: current value

LIBOR
Daysoriginal30 days later
303.12%
603.32%
903.52%
1203.72%3.92%
1503.92%
1804.12%
2x5 FRA4.30%(now 1x4 FRA) 4.14%




The current value of the $10 million FRA to the short position:
(4.30%-4.14%) * $10 million * (90/360) / (1+3.92%*(120/360))
= $3,948.4075

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