A Company Has Entered into a Forward Rate Agreement with a Corporate

Multiple Choice

A company has entered into a forward rate agreement with a corporate borrower.The following terms and conditions apply to the contract:
Notional principal:$350 000
Contract rate:12.65% per annum
Reference rate:13.10% per annum
FRA period:180 days
Who will be responsible for payment of the settlement amount?

A) The company
B) Neither party-no settlement amount is payable
C) The bank
D) The clearing house