In business and contract law, a forward-forward agreement (FFA) is a form of forward rate agreement in which party A agrees to lend party B the m1 amount of money, at future time t1. In return, B will pay to A a larger monetary amount m2 at time t2 > t1. The name "forward-forward agreement" derives from the fact that both issuing and repayment of the loan take place in the future. A regular forward rate agreement lends the money at once. A quoted forward rate is associated with every forward-forward agreement. This can be thought of as the interest rate earned by party A for lending the money to B.
See also
References
- Keith Redhead (2003). Introducing Investments: A Personal Finance Approach. Pearson Education. p. 307. ISBN 027367305X.