【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.