If a FRA covers six-month interest rates but will begin its cover in three months it will be written:
A) 6Mv9M.
B) 3Mv9M.
C) 3Mv6M.
D) 6Mv3M.

Question

Quizplus · Accepted Answer

A Forward Rate Agreement (FRA) described as 3Mv9M covers interest rates for a six-month period starting in three months. The first number (3M) indicates the time until the contract starts, and the second number (9M) indicates the time until the contract ends, thus covering a period from 3 to 9 months in the future.

If a FRA Covers Six-Month Interest Rates but Will Begin