0
What is the difference between a forward contract and a cash transaction?
Wiki User
∙ 12y ago
In a forward contract, you are setting the price now for something you'll buy later. A cash transaction involves setting the price for something you're buying today.
Wiki User
∙ 12y ago
Add your answer:
Earn +20 pts
Basic difference between forward contract and future contract?
Futures are traded in Organized Exchanges while Forwards are Over-The-Counter (OTC) traded
Reverse repo rate?
A Repurchase agreement (also known as a repo or Sale and Repurchase Agreement) allows a borrower to use a financial security as collateral for a cash loan at a fixed rate of interest. In a repo, the borrower agrees to sell immediately a security to a lender and also agrees to buy the same security from the lender at a fixed price at some later date. A repo is equivalent to a cash transaction combined with a forward contract. The cash transaction results in transfer of money to the borrower in exchange for legal transfer of the security to the lender, while the forward contract ensures repayment of the loan to the lender and return of the collateral of the borrower. The difference between the forward price and the spot price is the interest on the loan while the settlement date of the forward contract is the maturity date of the loan.
What is a forward contract?
A customized contract between two parties to buy or sell an asset at a specified price on a future date. A forward contract can be used for hedging or speculation, although its non-standardized nature makes it particularly apt for hedging.
What is ready and forward exchange rate?
•The merchant business in which the contract with the customer to buy or sell foreign currency is agreed to and executed on the same day is known as ready transaction. •Thus in practice, the terms ready and spot are used symbolically.
What are forward contracts in shares?
A forward contract is the simplest of the Derivative products. It is a mutual agreement between two parties, in which the buyer agrees to buy a quantity of an asset at a specific price from the seller at a future date. The Price of the contract does not change before delivery. These type of contracts are binding, which means both the buyer and seller must stay committed to the contract. This means they are bound to deliver or take delivery of the product on which the forward contract was agreed upon. Forwards contracts are very useful in hedging
Basic difference between forward contract and future contract?
Futures are traded in Organized Exchanges while Forwards are Over-The-Counter (OTC) traded
What is forward rate in foreign exchange market?
Transaction in future date by forward contract(future delivery) to purchase/sell foreign exchange at prevailing rate.
Reverse repo rate?
A Repurchase agreement (also known as a repo or Sale and Repurchase Agreement) allows a borrower to use a financial security as collateral for a cash loan at a fixed rate of interest. In a repo, the borrower agrees to sell immediately a security to a lender and also agrees to buy the same security from the lender at a fixed price at some later date. A repo is equivalent to a cash transaction combined with a forward contract. The cash transaction results in transfer of money to the borrower in exchange for legal transfer of the security to the lender, while the forward contract ensures repayment of the loan to the lender and return of the collateral of the borrower. The difference between the forward price and the spot price is the interest on the loan while the settlement date of the forward contract is the maturity date of the loan.
What are the differences between a forward contract a future contract and options?
1) forward contract is not standardised one..it is only traded in OTC(over the counter) where as future contract is a standardised one it is traded in Secondary Market
What is the basic difference between a forward and future market?
A forward contract is a private and customizable contract that needs to be settled at the end of the agreement and is traded over the counter. A futures contract has standardized terms and is traded on an stock or commodity exchange, where prices are settled on a daily basis until the end of the contract.
What is the difference between hedging and forward contracts?
A forward contract is an agreement between two parties to buy or sell an asset at a certain future time for a certain price agreed today. An option is an agreement between two parties for the option to buy or sell an asset at a certain future time for a certain price agreed today. The main difference is that a forward contract has to happen while an option may or may not happen depending on the value of the asset compared to the agreed price
What is the difference between forward and backwards scheduling?
jhfgg
What is the difference between forward kinemaics and reverse kinematics in robotics?
what is difference between forwad & reverse kinamatic
What is a Forex spot contract?
A spot contract, spot transaction, or simply spot, is a contract of buying or selling a commodity, security or currency for settlement (payment and delivery) on the spot date, which is normally two business days after the trade date. A spot contract is in contrast with a forward contract or futures contract where contract terms are agreed now but delivery and payment will occur at a future date.
What is a forward contract?
A customized contract between two parties to buy or sell an asset at a specified price on a future date. A forward contract can be used for hedging or speculation, although its non-standardized nature makes it particularly apt for hedging.
What is the difference between forward difference and backward difference?
Given an infinitely convergent sequence pn with limit p, the forward difference is the measure of the difference between the current term and he next. The backward difference is the measure of the difference between the current term and the previous.i.e.forward difference: Δpn=pn+1 - pnbackward difference: ∇pn=pn - pn-1Also, note that since they are both expressed by pn, the forward difference is recognised by the use of a delta before the pn, and the backward difference by the use of a nabla.
What is the difference between a 3 speed and a 4 speed automatic car?
difference between 3 and four speed is, a 3 speed has 3 forward gears. a 4 speed has 4 forward gears
