alleryStart learning →A firm buys a 6-month FRA at 6% on Rs 10 million. Settlement rate is 8%. Discounted payoff?
ARs 92,593
BRs 96,154
CRs 100,000
DRs 50,000
Answer & Solution
Correct answer: B. Rs 96,154
10,000,000 x 0.5 x 0.02 = 100,000, discounted by 1 + 0.5 x 0.08 = 1.04, giving about 96,154.
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