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Forward Rate

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Dictionary Says

Definition of 'Forward Rate'

The amount that it will cost to deliver a currency, commodity, or some other asset some time in the future.
Investopedia Says

Investopedia explains 'Forward Rate'

The forward rate is the price used to determine the price of a futures contract. It accounts for holding costs, appreciation and demand for the good.

Related Definitions

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    Forward Rate Agreement - FRA

    An over-the-counter contract between parties that determines the rate of interest, or the currency exchange rate, to be paid or received on an obligation beginning at a future start ...
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  • Spot Price

    The current price at which a particular commodity can be bought or sold at a specified time and place.
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  • Futures Contract

    A contractual agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a pre-determined price in the future. ...
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    • Appreciation

      An increase in the value of an asset over time. The increase can occur for a number of reasons including increased demand or weakening supply, or as a result of changes in inflation or ...
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    • Commodity

      1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often used as inputs in the production of other goods or services. ...
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    • Delivery Date

      1. The final date by which the underlying commodity for a futures contract must be delivered in order for the terms of the contract to be fulfilled. 2. The maturity date of a currency ...
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    • Implied Rate

      An interest rate that is determined by the difference between the spot rate and the forward/futures rate. The degree of relative costliness of a future rate can be assessed by comparing ...
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    • Mumbai Interbank Forward Offer Rate - MIFOR

      A rate that Indian banks and other derivative market participants used as a benchmark for setting prices on forward rate agreements and interest rate derivatives. MIFOR was a mix of the ...
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