BulbasaurNoLikeCardio
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Simple English definitions for legal terms
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A forward-rate agreement (FRA) is a contract that specifies the interest rate on an obligation on a future date. For example, a company may enter into an FRA to lock in a specific interest rate for a loan that it plans to take out in six months. This helps the company manage its risk by protecting it from potential interest rate increases.
These examples illustrate how FRAs can be used to manage risk and protect against potential interest rate changes.