![]() Unlike a forward-forward this is paid at the start of the borrowing (or depositing)įRA Forward Rate Agreements are a way of fixing a rate of interest for a date in the future and for a given period of time (forward / forward) ![]() This is an off the balance sheet instrument No principal amount is transferred - only margin Most FRA contracts are linked to LIBOR or EuriborĪ forward rate agreement (FRA) is a forward contract in which one party pays a fixed interest rate, and receives a floating interest rate equal to a reference rate (the underlying rate) This is an agreement to exchange a fixed interest rate payment for a floating interest rate payment A forward rate agreement (FRA) is an agreement to pay (or receive) on a future date the difference between an agreed interest rate (FRA rate) and the actual interest rate on that future date (on an agreed notional amount).
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