Long-Term Forward Contract

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Long-Term Forward Contract

A non-standardized, over-the-counter agreement in which one party agrees to buy a certain asset from the other at a certain price, at a certain time more than one year in the future. Because there is little secondary market for any forward contract, long-term forward contracts are zero-sum games; one party will win and the other will lose.
References in periodicals archive ?
This comparison lets us easily consider to what extent the recent behavior of long-term forward rates represents an unusual experience or not.
The main difference between the two episodes is that the rise in the federal funds rate in 2004-06 is much smoother and more predictable and long-term forward rates, in particular the 10-year rate, falls while the funds rate is rising.
Thus, in general, the affine model lives on top of a VAR estimate of long-term forward rates and adds nothing to it.

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