What Is the Difference Between Forward Rates and Spot Rates

question 87

Essay

What is the difference between forward rates and spot rates? What is the purpose of forward contracts?

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Definitions:

Hydrologic Cycle

The water cycle, which includes evaporation, precipitation, and flow to the ocean; supplies terrestrial organisms with a continual supply of fresh water.

Nitrification

The conversion of ammonia (NH3) to nitrate (NO3-) by certain bacteria (nitrifying bacteria) in the soil; part of the nitrogen cycle.

Transpiration

is the process by which moisture is carried through plants from roots to small pores on the underside of leaves, where it changes to vapor and is released to the atmosphere.

Aquatic Ecosystems

Water-based environments, including oceans, lakes, rivers, and wetlands, where plants and animals interact.