Which of the following statements is correct?
A) An adjusted settlement amount is paid at the end of the FRA contract period that includes reinvestment interest for late payment
B) An unadjusted settlement amount is paid at the end of the FRA contract period
C) An adjusted settlement amount is paid at the start of the FRA contract period that is discounted for early payment
D) An unadjusted settlement amount is paid at the start of the FRA contract period

Question

Quizplus · Accepted Answer

In a Forward Rate Agreement (FRA), the settlement amount is typically paid at the start of the contract period and is adjusted by discounting it to present value for early payment.

Which of the Following Statements Is Correct