Forward Forward

DEFINITION of 'Forward Forward'

An agreement between two parties to engage in a loan transaction in the future. The lender agrees to lend the borrower funds on a specified future date. The borrower agrees to repay the loan, plus a premium, at a date beyond the loan issue date.

BREAKING DOWN 'Forward Forward'

For example: On January 1st, Company A agrees to loan Mr. X $10,000 on June 1st. Mr. X agrees to repay Company A the original $10,000 plus an additional $1000 on December 1st. The $1000 is similar to paying interest on the loan.

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RELATED FAQS
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    Fundamentally, forward and futures contracts have the same function: both types of contracts allow people to buy or sell ... Read Full Answer >>
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