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

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.

Correct Answer:

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