Forward Rate Agreement is a contract calling for one counterparty to receive the fixed FRA rate and pay the floating rate (e. G., LIBOR) for a particular accrual period in the future, and for the other counterparty to do the reverse. Settlement is at the beginning of the accrual period, when the markets resolve the uncertainty about the floating rate, mainly because that reduces the credit risk associated with the contract. Cf. Swaplet.
Barry Goldsmith
| APA | Barry Goldsmith. (2010). forward rate agreement. Retrieved September 24, 2026, from http://smartdefine.org/forward_rate_agreement/definitions/1154473 |
| Chicago | Barry Goldsmith. 2010. "forward rate agreement" http://smartdefine.org/forward_rate_agreement/definitions/1154473 (accessed September 24, 2026). |
| Harvard | Barry Goldsmith 2010, forward rate agreement, Smart Define, viewed 24 September, 2026, <http://smartdefine.org/forward_rate_agreement/definitions/1154473>. |
| MLA | Barry Goldsmith. "forward rate agreement" 21 October 2010. Web. 24 September 2026. <http://smartdefine.org/forward_rate_agreement/definitions/1154473> |