Forward forward contract: Difference between revisions
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Revision as of 23:23, 7 March 2021
A forward forward borrowing or deposit is a binding contract struck today, for the physical borrowing or lending of funds at a fixed future date. (At an agreed rate, for a predetermined fixed period.)
The Principal amount borrowed or lent is physically transferred between the parties, and repaid - plus the contracted amount of fixed interest - at maturity.
Not to be confused with a Forward Rate Agreement, which is a derivative contract for differences.
