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.




© 2024 Better Solutions Limited. All Rights Reserved. © 2024 Better Solutions Limited TopPrevNext