, 2021, ABC entered into a P1,000,000 FRA 3-9 at 11%. The actual interest rates that would be given to ABC are 12.0%, 12.5%, and 11.25% on March 31, June 30, and Sept. 30 respectively. How much is the cost savings/(incremental costs) incurred by ABC from this contract? Notes in answering:
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Topic Covered:
On Jan. 1, 2021, ABC entered into a P1,000,000 FRA 3-9 at 11%. The actual interest rates that would be given to ABC are 12.0%, 12.5%, and 11.25% on March 31, June 30, and Sept. 30 respectively. How much is the cost savings/(incremental costs) incurred by ABC from this contract?
Notes in answering:
1. Do not round off anytime during the computation. However, decimals in your solution may be shown rounded off to two to five decimal places.
2. Final numerical answers must be rounded off to two decimal places (200.56 for P200.5555). Final answers in rates must be in percent, rounded off to two decimal places (6.67 for 6.6666%).
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