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  3. a bank sells a three against nine $4,000,000 fra o

A bank sells a three against nine $4,000,000 FRA on a six-month interest rate for...

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Accounting

A bank sells a three against nine $4,000,000 FRA on a six-month interest rate for a six-

month period beginning three months from today and ending nine months from today. The

agreement rate with the buyer is 6.5 percent. There are actually 183 days in the six-month

period. Assume that three months from today the settlement rate is 7 7/8 percent. Determine

how much the FRA is worth and who pays whom-- the buyer pays the seller or the seller pays

the buyer. pls explain the answer

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