Forward rate agreement

Forward rate agreement

In finance, a forward rate agreement (FRA) is a forward contract, 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 date.

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Part of Speech: noun
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Industry/Domain: Financial services
Category: Stocks & securities
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forward rate agreement

Banking; Investment banking

Abbreviation: FRA. A forward transaction between banks and industrial firms whereby the two parties agree on an interest rate for a future period and no initial margin payment is ...

forward rate agreement

Financial services; Stocks & securities

In finance, a forward rate agreement (FRA) is a forward contract, an over-the-counter contract between parties that determines the rate of interest, or the currency exchange rate, ...

forward rate agreement (FRA)

Financial services; General Finance

Agreement to borrow or lend at a specified future date at an interest rate that is fixed today.

forward rate agreement (FRA)

Banking; Personal banking

A customized agreement between two parties specifying the rate to be paid at some future date. Usually tied to LIBOR.

forward rate agreement (FRA)

Financial services; Commodity exchange

An OTC forward contract on a short-term interest rate. The buyer of a FRA is a notional borrower, i.e., the buyer commits to pay a fixed rate of interest on some notional amount ...

above par

Financial services; Stocks &securities

If bonds are re-sold on the secondary market, and if interest rates are lower that the bond's coupon rate, the bond will be sold at a premium, or above par.

P/E ratio

Financial services; Stocks &securities

The ratio of a company's current price per share and average earnings per share. The former is divided by the latter. A high ratio suggests high growth potential in the future.

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