An FRA in which the rate is not set according to rates in the market is called
A)a short FRA
B)a long FRA
C)an off-market FRA
D)a hedged FRA
E)an FRA spread

Question

Quizplus · Accepted Answer

An off-market FRA is one in which the rate is not set according to rates in the market. This may occur when one party has specific needs or concerns that differ from current market conditions, resulting in a rate that is higher or lower than the prevailing market rate. Short FRA and long FRA refer to the duration of the FRA contract, and a hedged FRA is one in which the parties involved use other financial instruments to mitigate risk. An FRA spread is a strategy involving the use of two or more FRAs with different settlement dates to manage interest rate risk.

An FRA in Which the Rate Is Not Set According