Forward Rate Agreement (FRA)

[sunandaC]

A Forward Rate Agreement (FRA) is a financial contract between two

parties exchanging or swapping a stream of interest payments for a


notional principal amount on settlement date, for a specified period from

start date to maturity date. Accordingly, on the settlement date, cash


payments based on contract (fixed) and the settlement rate, are made

by the parties to one another.

The settlement rate is the agreed benchmark/reference rate prevailing on

the settlement date.

 

[rosemarry2]

A Forward Rate Agreement (FRA) is a financial contract between two

parties exchanging or swapping a stream of interest payments for a


notional principal amount on settlement date, for a specified period from

start date to maturity date. Accordingly, on the settlement date, cash


payments based on contract (fixed) and the settlement rate, are made

by the parties to one another.

The settlement rate is the agreed benchmark/reference rate prevailing on

the settlement date.

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