It is important to note the difference of who benefits when interest rates move in an FRA and an interest rate futures contract. The buyer of an FRA benefits if the reference rate increases and the seller benefits if the reference rate decreases. In a futures contract, the buyer benefits from a falling rate while the seller benefits from a rising rate.

Question

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In an FRA, the buyer benefits from a rising reference rate, while in a futures contract, the buyer benefits from a falling rate.

It Is Important to Note the Difference of Who Benefits