A company that wishes to lock in an interest rate on future borrowing can either enter into an FRA or it can borrow long-term funds and lend short-term.

Name: A company that wishes to lock in an interest rate on future borrowing can either enter into an FRA or it can borrow long-term funds and lend short-term.
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Question

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Both entering into a forward rate agreement (FRA) and borrowing long-term funds to lend short-term can be methods for a company to lock in an interest rate on future borrowing.

A Company That Wishes to Lock in an Interest Rate