An advance interest rate agreement (FRA) is ideal for an investor or company that wants to guarantee an interest rate. They allow participants to subsequently make a known interest payment and receive an unknown interest payment. This helps protect investors from the volatility of future interest rate movements. With the conclusion of a FRA, the parties agree on an interest rate for a given period starting at a future date, based on the nominal amount indicated at the beginning of the contract. On the fixing date (October 10, 2016), the 6-month LIBOR is set at 1.26222, which corresponds to the billing rate applicable to the company`s FRA. 2×6 – Fra with a waiting period of 2 months (forward) and a contract duration of 4 months. Dave wants to receive £100 in 3 months. How much will it cost him today? The price of this futures contract would be the current value of £100 in 3 months. FRAs are money market instruments and are traded by both banks and companies. .