Forward Rates
This is an implied (or theoretical) interest rate in the future.
This is a breakeven reinvestment rate
We can use the yields of zero coupon bonds to calculate this
Forward Rate - Less Than 12 Months
The forward rate can be calculated using this formula:
Forward Rate - More Than 12 Months
The forward rate can be calculated using this formula:
Forward Curve
A forward curve is not a curve of forward rates.
A forward curve is a zero coupon curve used to calculate a cash flow in the future.
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