Definitions for "Forward Rate Agreement"
Related Terms:
Forward rate agreements, Interest rate swap, Fra, Contract rate, Interest rate swaps, Forward rate, Interest rate futures, Floor, Rate lock-in, Basis swap, Lock-in, Floating rate, Lock in, Floating rate notes, Rate lock, Floating rate note, Floating-rate bond, Reference rate, Interest rate floor, Swaps, Collar, Adjustment date, Frn, Floating-rate note, Fixed interest rate, Fixed rate, Lock, Fixed interest, Inverse floater, Floating interest rate, Lock-in rate, Floater, Floating rate of interest, Rate commitment, Libor, Index rate, Fixed rates, Adjustment interval, Variable interest rate, Interest rate parity, Teaser rate, Adjustment period, Adjustable rate, Interest rate adjustment period, Honeymoon rate, Capped rate, Capped loan, Interest rate cap, Libor rate, Arms
FRA. A forward contract that specifies an interest rate to be paid on an obligation...
Agreement to borrow or lend an amount of cash some time in the future at an interest rate that is fixed today.
contract for borrowing or lending at a stated interest rate over a stated time period that begins at some time in the future. FRAs are used by parties wishing to protect themselves against future interest-rate movements.
This agreement allows purchasers/sellers to fix the interest rate for a specified period in advance.
An agreement between t wo parties to exchange a rate differential during a predetermined time period, based on an agreed future rate during that period.
a cash-settled obligation on interest rates for a pre-set period on a pre-set interest rate index with a forward start date
a contract between two parties to make interest payments to each other on a notional principal amount for a specified period in the future
a default-free loan that can be arranged today to be made over an interval in the future
a financial contract between two parties to exchange interest payments for a notional priniciple amount on settlement date for a specified period from the date of striking the deal to its maturity
A type of derivative obliging two parties to make a cash settlement at a future date for the difference between a contracted rate of interest and the current market rate, based on a notional amount. An FRA can act as a hedge against future movements in market interest rates.
A borrowing or lending contract where interest conditions are determined in the present even though the contract does not take effect until a future date.
An agreement to pay or receive, on an agreed future date, the difference between a fixed interest rate agreed at the outset and a reference interest rate actually prevailing on a given future date for a given period.
A transaction in which two counterparties agree to a single exchange of cash flows based on a fixed and a floating rate respectively. A Forward Rate Agreement can be viewed as a one-date interest rate swap.
forward contract with a fixed interest rate today that is paid in the future
An agreement between two parties to set future borrowing/lending rates in advance.
A cash-settled forward contract on a short-term loan.
a contract obligating two parties to exchange the difference between two interest rates at some future date. One rate being fixed now and the other being a future floating rate (e.g. LIBOR)
Agreement to borrow or lend at a specified future date at an interest rate that is fixed today.
A forward contract that stipulates an interest rate to be paid on an obligation commencing on a date in the future. Any loss or gain on the obligation is treated as similar to what a loss or gain on a futures or options contract would be.
A type of forward contract which is linked to interest rates.
A contract in which two parties agree to an interest rate (fixed or floating) that will apply to a certain notional principal during a specified future period of time. An FRA is generally settled in cash at the beginning of the forward period.
A bilateral forward contract that fixes the interest rate on the day of the agreement for payment at a future settlement date; typically this can be up to two years later. FRAs are used to hedge against interest rate exposure in the sense that one of the parties pays a fixed rate and the other a variable rate. If, at the settlement date, the market rate is lower than the previously agreed rate, the purchaser will indemnify the seller for that difference and conversely, if the market rate has risen, the seller will compensate the purchaser. Also called future rate agreement.
An agreement where the counterparties agree to pay or receive the difference between LIBOR on the expiry date of the FRA and the agreed FRA rate. An example of a contract for a difference and thus an investment.
In finance, a 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). The payments are calculated over a notional amount over a certain period, and netted, i.e. only the differential is paid. It is paid on the termination date.