3. Consider a FRA where IBM agrees to borrow $100 mil. from a dealer for 6 months starting in 4 years. The contractual FRA rate is 5.5% per annum. Assume that in 4 years the actual 6-month LIBOR is 7.5% per annum. The FRA is settled when ________ pays _______ the amount of _________. a. IBM; dealer; $1,000,000 b. dealer; IBM; $1,000,000 c. IBM; dealer; $963,855 d. dealer; IBM; $963,855 e. dealer; IBM; $36,145

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Calculating the Return On A Loan