Forward interest rate

Forward interest rate

Interest rate fixed today on a loan to be made at some future date.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Forward Interest Rate

An interest rate to which a borrower and lender agree for a loan to be made in the future. According to the unbiased expectations hypothesis, forward interest rates predict spot interest rates at the time the loan is actually made, but many analysts dispute whether this is true.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
These ten-year notes were issued at 99.893% of par value with a coupon of 4.100% and the company also initiated forward interest rate swap agreements with a total notional amount of USD400m, it stated.
In the market, investors can obtain these future short rates by buying forward interest rate agreements, which are customized contracts that specify the interest rate to be paid or received on a future date.
Cedar said it also entered into forward interest rate swap agreements which convert the LIBOR rates to fixed rates for the new term loans beginning July 1, 2014 through their maturities.
In Section 2, we give the basic setup and HJM forward interest rate model.
The meeting, chaired by President Xi Jinping, called for keeping reasonable growth in credit and social financing next year, while pushing forward interest rate and yuan currency reforms.
"Furthermore, inflation pressure is building, which should bring forward interest rate rises in the developed markets and encourage policy tightening in emerging markets.
where df (t, T) denotes the instantaneous forward interest rate on date t for borrowing or lending on date T, [z.sub.i](t) is independent one-dimensional Wiener process, a(t, T,f)dt is the drift and [[sigma].sub.i] (t, T, f) the volatility coefficients of the forward rate of maturity T.
RV: Let [lendr.sub.t] = the forward interest rate to lend at time t.
Business leaders and unions called for the Bank of England's monetary policy committee to bring forward interest rate cuts to aid the ailing economy.
Norges Bank calculates the forward interest rate using four money market rates with maturities between one to twelve months, and nine swap rates (7) with maturities from two to ten years.
We investigate the sensitivity of the prices of cap derivatives to alternative specifications of the forward interest rate derivatives.

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