(So have their teachers.) Even the Founding Fathers of our country indulged in gripe sessions. In fact, a list of grievances comprises the longest section of the Declaration of Independence; however, the source of the document's power is its firm philosophic foundation.
Not to be confused with forward rate or forward price. The forward exchange rate (also referred to as forward rate or forward price) is the exchange rate at which a bank agrees to exchange one currency for another at a future date when it enters into a forward contract with an investor.orward exchange rates have important theoretical implications for forecasting future spot exchange rates. Financial economists have put forth a hypothesis that the forward rate accurately predicts the future spot rate, for which empirical evidence is mixed.
A forward rate is sometimes a useful way to summarize the information in the term structure of interest rates. Suppose for example that today you sell a 5-year zero-coupon bond currently worth $1000, and simultaneously buy a 10-year zero-coupon bond that is also currently worth $1000.n effect, youâd have entered into an agreement today to buy a 5-year bond 5 years from now. The interest rate on that future bond is something you could calculate today from the current 5-year and 10-year yields to maturity, and is known as the 5-year, 5-year forward rate.