forward rate agreement (FRA)
A customized agreement between two parties specifying the rate to be paid at some future date. Usually tied to LIBOR. American Banker Glossary
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(See: forward rate agreement)
Agreement to borrow or lend at a specified future date at an interest rate that is fixed today . Bloomberg Financial Dictionary
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See forward rate agreement. Dresdner Kleinwort Wasserstein financial glossary
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forward rate agreement (FRA)
An agreement to borrow or lend at a specified future date at an interest rate that is fixed today. The borrowing and lending is purely notional as the contract allows the purchaser to fix interest costs for a specific future period. Exchange Handbook Glossary
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A forward rate agreement is an interest-rate derivative that allows investors and borrowers to set the interest rate on a short-term investment or loan in advance for a predetermined period.
► See also Derivatives.
Financial and business terms. 2012.