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forward rate

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

Notes:
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.


Forward rate
A projection of future interest rates calculated from either spot rates or the yield curve.

forward rate
1. The expected yield on a given fixed-income security at a particular time in the future. For example, if the yield on 6-month Treasury bills is expected to be 10.5% in a year, this yield is the forward rate on 6-month bills.
2. The rate at which a particular currency or commodity may be purchased on a forward contract.

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Carlton negotiated a very inexpensive 12-month forward rate lock agreement, which was subsequently funded by the lender.
The term structure of interest rates can be determined by any of the discount function D(0,T), the yield curve y(0,T), or the forward rate f(0,T), where T is time to maturity from today (time 0).
 
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