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    NEW QUESTION: 1
    Calculate the settlement amount for a buyer of a 3 x 6 FRA with a notional of $1m and contract rate of 5%.
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    A. Receive $9434
    B. Pay $2463
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    D. Receive $2463
    Answer: D
    Explanation:
    Explanation
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    (Here:
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    - 6% - 5% represents the difference between the contracted and the realized interest rates
    - 3/12 is the 3 month period from month 3 to 6
    - Finally, we divide by the current interest rate for 3 months to present value the payment from month 6 to month 3)

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