For hedging interest rates the advantages of a FRA are:
A) it is not standardised like a futures contract.
B) it does not have associated margin payments.
C) it is flexible with regard to contract period and amount.
D) all of the given choices.

Question

Quizplus · Accepted Answer

Forward Rate Agreements (FRAs) offer several advantages for hedging interest rates, including non-standardization (allowing for customization in terms of contract period and amount), no associated margin payments, and flexibility regarding contract specifics.

For Hedging Interest Rates the Advantages of a FRA Are