【学习笔记】International Finance 国际金融论研究 学习笔记-42
Part II
International Financial Markets -5
Ch11 -5
InternationalMoney Market
Forward Rate Agreements (FRA)
1. Aninterbank contract that involves two parties, a buyer and a seller.
2. Forwardrate agreements can be used to:
1) Hedgeassets that a bank currently owns against interest rate risk.
Forexample, a bank that has made a three-month
Eurodollar loan against an offsettingsix-mont
Eurodollar deposit could protect itself byselling a “three against six” FRA.
2) Also,speculate on the future course of interest rates.