forward price

(redirected from Forward exchange rate)
Also found in: Financial.

forward price

The price for a physical commodity to be delivered at some agreed time in the future. Forward prices are used in futures trading.
Dictionary of Unfamiliar Words by Diagram Group Copyright © 2008 by Diagram Visual Information Limited
References in periodicals archive ?
We first develop the theoretical rationale of the forward exchange rate unbiasedness hypothesis (FUH) for buyers of forward exchange under an assumption of risk neutrality and interest rate parity.
Wallace (1999), "Non-Informative Tests of the Unbiased Forward Exchange Rate," Journal of Financial and Quantitative Analysis 34(2): 265-291.
The report forecasts that the forward exchange rate for Q3 2016 will reach EGP 10.48.
The NBU is entitled to terminate a swap transaction and recalculate the forward exchange rate at which the second leg of the swap transaction is settled.
The moribund forwards market for the Saudi riyal suddenly started pricing in speculation that the world's largest oil producer could be forced to abandon its 30-year peg to the US dollar.The market expected a 12-month forward exchange rate of SR3.85 to the dollar, a 2.7 per cent devaluation from the SR3.75 level that has, in essence, held since 1986.
dollar interest rate, [F.sup.D/USD.sub.t] = forward exchange rate for one period forward.
Finally, assume that the 90-day forward exchange rate is $0.009295, which means that you can exchange 1 PKR for 0.009295 dollar, or receive 107.58 PKR per dollar exchanged, 90 days from now.
According to the theory, the currency with higher (lower) short-term interest rate will exhibit a discount (premium) in its forward exchange rate. In short, the theory states that certain economic forces work toward equalizing investment yields and borrowing costs in different currencies of different countries.
(12) The only variable that is not a simple first difference is the expected exchange rate change, which is the percentage discount of the one-month nondeliverable forward exchange rate relative to the RMB/US dollar spot exchange rate.
where [E.sub.t] ([s.sub.t+k]|[[OMEGA].sub.t]) = logarithm of expected spot exchange rate at time t + k, based on information known at time t, [s.sub.t+k] = logarithm of spot exchange rate at time t, [f.sup.(k).sub.t] = logarithm of the k-period forward exchange rate.
If the forward exchange rate is an unbiased predictor of the future spot rate, exchange risk will have no effect on the expected profits of a hedged firm.

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