In chapter 11 for FRAs Rk is the agreed rate for the FRA and Rf is the actual forward rate observed. In chapter 12 for caplets Rk is the actual observed rate and Rx is the cap rate/strike rate. Why the confusing notation? Or have I got something the wrong way round?
Yes, not the best notation, I agree. Thank you for this. In terms of you and your exam, the very fact that you have spotted that this notation is inconsistent indicates that you understand what all the various rates are and there's nothing for you to worry about Good luck! John
