You Borrow Money at Libor with a Floating-Rate Note for One

Multiple Choice

You borrow money at Libor with a floating-rate note for one year with two semi-annual payments. What position do you need to add to this note to fix the cost of borrowing for the entire year?

A) Sell a $6 \times 12$ FRA.
B) Buy a $6 \times 12$ FRA.
C) Buy a one-year zero-coupon bond and short a 1.5-year zero-coupon bond.
D) Buy a six-month zero-coupon bond and short a one-year zero-coupon bond.