What is a spot rate and forward rate?

Contrary to a spot rate, a forward rate is used to quote a financial transaction that takes place on a future date and is the settlement price of a forward contract. However, depending on the security being traded, the forward rate can be calculated using the spot rate. read more

The forward rate and spot rate are different prices, or quotes, for different contracts. The forward rate is the settlement price of a forward contract, while the spot rate is the settlement price of a spot contract. read more

A forward rate is an interest rate applicable to a financial transaction that will take place in the future. Forward rates are calculated from the spot rate, and are adjusted for the cost of carry to determine the future interest rate that equates the total return of a longer-term investment with a strategy of rolling over a shorter-term investment. read more

The spot rate is the rate at which you can buy or sell something today. The forward rate is the rate at which you can buy or sell something at any given day in the future. Say, for instance, you go to the local market. You notice that the price of a mango is Rs. 30. This is the spot rate of the mango i.e. read more