ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -When buyers and sellers enter an agreement to buy and sell a foreign currency after 90 days of the deal, it is called forward transaction. The exchange rate settled between buyer and seller for forward sale and purchase of currency is called forward exchange rate.

Detailed explanation-2: -The forward exchange rate is a price quoted today for the exchange of currencies at the maturity of the forward contract. To find the delivery date for a 90-day forward contract, one first finds the spot value date, which is typically two business days in the future relative to the day that the contract is made.

Detailed explanation-3: -Forward Contract is an agreement to exchange one currency for another currency on a specific date in future, at a pre-determined exchange rate, set at the time the contract is made.

Detailed explanation-4: -Currency forward outright transaction (FX forward outright) is a transaction between you and the bank to purchase one currency against selling another currency at a fixed price for delivery on an agreed date in the future.

Detailed explanation-5: -A Forward Exchange Contract (also referred to as a Forward Contract) is an arrangement that allows you to transfer money at some time (up to 12 months) in the future at an exchange rate that you agree to now, so that you know what the exchange rate will be at the time the transaction takes place.