EXOGEN UPDATE: IRAQ HAS A LIVE INTERNATIONAL EXCHANGE RATE
RIGHT NOW TODAY (PART 1), 11 JULY
IRAQ HAS A LIVE INTERNATIONAL EXCHANGE RATE RIGHT NOW TODAY
(PART 1)
THEY HAVE PAID FOR ALL THE CARGO SHIPS FILLED WITH
CONTAINERS COMING IN GLOBALLY THAT ARE UNLOADING WITH PRODUCTS RIGHT NOW TODAY
AND BEING DELIVERED TO ALL PROVINCES IN IRAQ.................. through Forward
rate agreement
Exogen:A FORWARD RATE AGREEMENT IS A BANK INSTRUMENT AND
PRODUCT. NO RESEARCH IS NEEDED, AND THEY ARE USED DAILY
GLOBALLY............100% FACT
INFORMATION ABOUT FORWARD RATE AGREEMENT:
In finance, a forward rate agreement (FRA) is a forward
contract, an over-the-counter contract between parties that determines the rate
of interest, or the currency exchange rate, to be paid or received on an
obligation beginning at a future start date. The contract will determine the
rates to be used along with the termination date and notional value.[1]On this
type of agreement, it is only the differential that is paid on the notional
amount of the contract. It is paid on the effective date. The reference rate is
fixed one or two days before the effective date, dependent on the market
convention for the particular currency. FRAs are over-the counter derivatives.
FRAs are very similar to swaps except that in a FRA a payment is only made once
at maturity. Instruments such as interest rate swap could be viewed as a chain
of FRAs.
Many banks and large corporations will use FRAs to hedge
future interest or exchange rate exposure. The buyer hedges against the risk of
rising interest rates, while the seller hedges against the risk of falling
interest rates. Other parties that use Forward Rate Agreements are speculators
purely looking to make bets on future directional changes in interest
rates.[citation needed] The development swaps in the 1980s provided organisations
with an alternative to FRAs for hedging and speculating.
In other words, a forward rate agreement (FRA) is a
tailor-made, over-the-counter financial futures contract on short-term
deposits. A FRA transaction is a contract between two parties to exchange
payments on a deposit, called the Notional amount, to be determined on the
basis of a short-term interest rate, referred to as the Reference rate, over a
predetermined time period at a future date. FRA transactions are entered as a
hedge against interest rate changes. The buyer of the contract locks in the
interest rate in an effort to protect against an interest rate increase, while
the seller protects against a possible interest rate decline. At maturity, no
funds exchange hands; rather, the difference between the contracted interest
rate and the market rate is exchanged. The buyer of the contract is paid if the
reference rate is above the contracted rate, and the buyer pays to the seller
if the reference rate is below the contracted rate. A company that seeks to
hedge against a possible increase in interest rates would purchase FRAs,
whereas a company that seeks an interest hedge against a possible decline of
the rates would sell FRAs.
CONTENTS
[hide]
1 Payoff formula
2 FRAs Notation
3 References
4 See also
PAYOFF FORMULA[EDIT]
The netted payment made at the effective date is as follows
\mbox{Payment} = \mbox{Notional Amount} * \left(
\frac{(\mbox{Reference Rate}-\mbox{Fixed Rate}) * \alpha }{ 1 + \mbox{Reference
Rate} * \alpha } \right)
The Fixed Rate is the rate at which the contract is agreed.
The Reference Rate is typically Euribor or LIBOR.
\alpha is the day count fraction, i.e. the portion of
a year over which the rates are calculated, using the day count convention used
in the money markets in the underlying currency. For EUR and USD this is
generally the number of days divided by 360, for GBP it is the number of days
divided by 365 days.
The Fixed Rate and Reference Rate are rates that should
accrue over a period starting on the effective date, and then paid at the end
of the period (termination date). However, as the payment is already known at
the beginning of the period, it is also paid at the beginning. This is why the
discount factor is used in the denominator.
FRAS NOTATION[EDIT]
FRA Descriptive Notation and Interpretation
Notation Effective
Date from now Termination Date from
now Underlying Rate
1 x 4 1 month 4 months 4-1 = 3 months LIBOR
1 x 7 1 month 7 months 7-1 = 6 months LIBOR
3 x 6 3 months 6 months 6-3 = 3 months LIBOR
3 x 9 3 months 9 months 9-3 = 6 months LIBOR
6 x 12 6 months 12 months 12-6 = 6 months LIBOR
12 x 18 12
months 18 months 18-12 = 6 months LIBOR
How to interpret a quote for FRA?
[US$ 3x9 - 3.25/3.50%p.a ] - means deposit interest starting
3 months from now for 6 month is 3.25% and borrowing interest rate starting 3
months from now for 6 month is 3.50% (see also bid–offer spread). Entering a
"payer FRA" means paying the fixed rate (3.50% p.a.) and receiving a
floating 6-month rate, while entering a "receiver FRA" means paying
the same floating rate and receiving a fixed rate (3.25% p.a.).
REFERENCES[EDIT]
SEE ALSO[EDIT]
Forward rate
Derivative (finance)
List of finance topics
Forward Rate Agreements on Wikinvest
===================================================================
EXOGEN UPDATE
: IRAQ HAS A LIVE INTERNATIONAL EXCHANGE RATE RIGHT NOW
TODAY
(PART 2), 11 JULY
THIS WILL GIVE YOU AN UNDERSTANDING OF HOW CARGO IS SHIPPED
GLOBALLY FROM COUNTRY TO COUNTRY. DO YOU REALLY THINK
A
COUNTRY WOULD SHIP A CARGO SHIP TO IRAQ WITH NO PAYMENT
IN
FULL UP FRONT AND COMPLETE INSURANCE COVERAGE.
NOTE: THEY ARE UNLOADING INTERNATIONAL CARGO SHIPS RIGHT NOW
IN IRAQ TODAY!!!!!!!!!!!
THERE IS A LIVE INTERNATIONAL EXCHANGE RATE IN IRAQ RIGHT
NOW TODAY!!!!!
DO YOU THINK A BUSINESS , COMPANY OR COUNTRY WOULD
TRUST
IRAQ WITH AN IOU FOR A CARGO SHIP WHEN HISTORICALLY IRAQ IS
ONE
OF THE MOST CORRUPT COUNTRIES ON THE PLANET?
FOB (shipping)
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