Business/Finance

In finance, forward contract is known as the forward rate agreement. It is the agreement between the two parties. It is used to determine the currency exchange rate, the rate of interest and many more. The determination contains the termination date and notional value. The agreement is essential for determining the rate of interest or the exchange rates. It is also known as the future rate agreement. It is simple known as FRA. It is more flexible. It is a one kind of institution. It provides fixed interest rates for standard period. It is a short term loan. In this loan, the interest rate is called as FRA rates. Most of the banks and large corporations use the concept of FRA. The fixed rate is known as the FRA rate. It is agreed by both parties. The floating rate is also known as the reference rate. FRA is made with the combination of LBOR and Euribor.