D&R A3 3 - 1 Today is June 1. Sustainable Corporation has an obligation of $25 million coming due on August 1. The company is planning to borrow this amount on August 1 to fulfill its obligation, and...

D&R A3

3 - 1

Today is June 1. Sustainable Corporation has an obligation of $25 million coming due on August 1.

The company is planning to borrow this amount on August 1 to fulfill its obligation, and plans to pay back the loan on December 1.

The company’s borrowing rate is LIBOR + 125 basis points.

The company’s bank presents it with the following LIBOR term structure:

For the calculation of interest, the bank assumes 30 days in a month, and 360 days in a year.

Is it best to take a long or short position in the FRA?