What does FRA mean in GENERAL
A Forward Rate Agreement (FRA) is a type of financial agreement where two parties agree to exchange money for a specified period at an interest rate that has been predetermined. It is most commonly used to hedge against movement in the short-term interest rates. FRAs are traded over-the-counter and can usually be customized to meet the needs of the parties involved.
FRA meaning in General in Business
FRA mostly used in an acronym General in Category Business that means Forward Rate Agreement
Shorthand: FRA,
Full Form: Forward Rate Agreement
For more information of "Forward Rate Agreement", see the section below.
Essential Questions and Answers on Forward Rate Agreement in "BUSINESS»GENERALBUS"
What is a Forward Rate Agreement?
A Forward Rate Agreement (FRA) is a type of financial agreement where two parties agree to exchange money for a specified period at an interest rate that has been predetermined.
How are FRAs typically used?
FRAs are most commonly used to hedge against movement in the short-term interest rates.
Where do FRAs typically take place?
FRAs are traded over-the-counter and can usually be customized to meet the needs of the parties involved.
Who typically enters into FRA arrangements?
Financial institutions, corporations, investment funds, and individual investors are all capable of entering into FRA agreements.
Is there any risk associated with FRAs?
Yes, there is always risk associated with investing, including with Forward Rate Agreements. It's important to understand all aspects of how these agreements work before entering into one.
Final Words:
Overall, Forward Rate Agreements (FRAs) provide an effective way for parties to hedge against changes in short-term interest rates through customized financial agreements between two entities that have established creditworthiness and negotiated terms that align with their respective risk tolerances.
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