CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

The payoff of a "3 x 6 FRA" is determined by ______-month Libor when the FRA expires in ______ months.
A. six; three
B. three; six
C. three; three
Explanation: The 3 indicates that the FRA expires in three months. The underlying is implied by the difference in the 3 and the 6. That is, the payoff of the FRA is determined by three-month Libor when the FRA expires in three months.

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