An)__________ is a contract that fixes an interest rate today on a future loan or deposit
A)inverse floater
B)step-up
C)step-down
D)forward forward

Question

Quizplus · Accepted Answer

A forward forward contract is a type of agreement that enables the investor or the borrower to lock in an interest rate for a future date. This means that even if the interest rate in the market increases, the borrower will still have to pay the agreed-upon rate. This helps to manage the risk of interest rate fluctuations and provides some certainty to both parties involved in the contract. The other choices listed, inverse floater, step-up, and step-down, relate to different types of bonds or securities and do not accurately describe the scenario of fixing an interest rate for a future loan or deposit.

An)__________ Is a Contract That Fixes an Interest Rate Today