Abstract
Forward contracts are the simplest of all derivative instruments, and can be used in nearly all types of commercial transactions. A forward contract is simply an agreement to buy or sell something at an agreed price at some point in the future. Many goods are bought and sold uniquely by means of forward contracts. For example, if you order a new suit from your tailor, you will expect to pay a fixed sum of money for the suit on the day that it is finished. Most home purchases link an agreed price to a settlement date. These are examples of forward contracts.
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© 2002 Frances Cowell
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Cowell, F. (2002). Appendix 2: Forward Contracts. In: Practical Quantitative Investment Management with Derivatives. Finance and Capital Markets Series. Palgrave Macmillan, London. https://doi.org/10.1057/9780230501874_23
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DOI: https://doi.org/10.1057/9780230501874_23
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-42528-0
Online ISBN: 978-0-230-50187-4
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