Difference between revisions of "FRA"
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In essence an FRA is a bet on interest rates. | In essence an FRA is a bet on interest rates. | ||
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Revision as of 12:19, July 13, 2016
A forward rate agreement (FRA) is an interest-rate derivative allowing investors to set in advance an interest rate on an investment or loan, while protecting the investors against risk. The FRA requires no upfront payment, and is collected when the instrument matures or expires.
In essence an FRA is a bet on interest rates.