Forward Trade is the trade which involves agreeing today on an exchange rate for settlement in 90 days.
This interest rate is generally calculated based on relationship between interest rates and maturities. Forward rate is helpful because it helps a investor to choose an investment option with the highest profitable rate.
It is calculated using the yield bond. It is a private agreement which is settled over the end of agreement and is traded over the counter. Factors which affect the forward rate are interest rate, terms of trade, recession etc.
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