Introduction to Forward Contract | Finance & Capital Markets | Math Solution | Real Life Examples

Part 2: Math

A forward contract is 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.

Forward contracts can involve the exchange of foreign currency and other goods, not just commodities. For example, if oil is trading at $50 a barrel, the company might sign a forward contract with its supplier to buy 10,000 barrels of oil at $55 each every month for the next year.

To know Forward Contract in more details, watch the full video.

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[jananiravinag]

Clear and Precise! Your knowledge is way to become an "underlying asset" based on which students' performance might depend...! wink.