I find this topic extremely confusing!
Post some questions. There are many here that are good at explaining them.
its basically the first step of Annualizing and de-annualizing that i don’t get. Here’s an example from SchweserPro: 30 days ago, J. Klein took a short position in a $10 million 90-day forward rate agreement (FRA) based on the 90-day London Interbank Offered Rate (LIBOR) and priced at 5%. The current LIBOR curve is: 30-day = 4.8% 60-day = 5.0% 90-day = 5.1% 120-day = 5.2% 150-day = 5.4% The current value of the FRA, to the short, is closest to: A) - $15,495. B) - $15,154. C) - $15,280. D) - $15,331
http://www.analystforum.com/phorums/read.php?12,708128 And that has a link to an earlier thread on this same question. Hope that helps