Which of the following is a 1 x 4 FRA?
A)The FRA expires in one month,and the underlying Eurodollar expires in three months.
B)The FRA expires in four months,and the underlying Eurodollar expires in one month.
C)The FRA expires in one month,and the underlying Eurodollar expires in four months.
D)The FRA expires in three months,and the underlying Eurodollar expires in four months.
E)The FRA expires in one month,and the underlying Eurodollar expires in five months.

Question

Quizplus · Accepted Answer

A 1 x 4 FRA means the contract expires in 1 month and settles against the prevailing 4-month Eurodollar interest rate. Only choice C matches this criteria.

Which of the Following Is a 1 X 4 FRA