Definition of Range forward

Range forward

A forward exchange rate contract that places upper and lower bounds on the cost of foreign exchange.

Closing range

Also known as the range. The high and low prices, or bids and offers, recorded during the
period designated as the official close. Related: settlement price.

Cost company arrangement

Arrangement whereby the shareholders of a project receive output free of
charge but agree to pay all operating and financing charges of the project.

Forward contract

A cash market transaction in which delivery of the commodity is deferred until after the
contract has been made. It is not standardized and is not traded on organized exchanges. Although the
delivery is made in the future, the price is determined at the initial trade date.

Forward cover

Purchase or sale of forward foreign currency in order to offset a known future cash flow.

Forward delivery

A transaction in which the settlement will occur on a specified date in the future at a price
agreed upon on the trade date.

Forward differential

Annualized percentage difference between spot and forward rates.

Forward discount

A currency trades at a forward discount when its forward price is lower than its spot price.

Forward exchange rate

Exchange rate fixed today for exchanging currency at some future date.

Forward Fed funds

Fed funds traded for future delivery.

Forward forward contract

In Eurocurrencies, a contract under which a deposit of fixed maturity is agreed to
at a fixed price for future delivery.

Forward interest rate

Interest rate fixed today on a loan to be made at some future date.

Forward looking multiple

A truncated expression for a P/E ratio that is based on forward (expected)
earnings rather than on trailing earnings.

Forward market

A market in which participants agree to trade some commodity, security, or foreign
exchange at a fixed price for future delivery.

Forward premium

A currency trades at a forward premium when its forward price is higher than its spot price.

Forward rate

A projection of future interest rates calculated from either the spot rates or the yield curve.

Forward rate agreement (FRA)

Agreement to borrow or lend at a specified future date at an interest rate
that is fixed today.

Forward sale

A method for hedging price risk which involves an agreement between a lender and an investor
to sell particular kinds of loans at a specified price and future time.

Forward trade

A transaction in which the settlement will occur on a specified date in the future at a price
agreed upon the trade date.

Range

The high and low prices, or high and low bids and offers recorded during a specified time.

Target zone arrangement

A monetary system under which countries pledge to maintain their exchange rates
within a specific margin around agreed-upon, fixed central exchange rates.

Trading range

The difference between the high and low prices traded during a period of time;
with commodities, the high/low price limit established by the exchange for a specific commodity for any one day's trading.

Feedforward

The process of determining prospectively whether strategies are likely to achieve the target
results that are consistent with organizational goals.

Relevant range

The upper and lower levels of activity within which the business expects to be operating within the short-term planning horizon (the budget period).

dual pricing arrangement

a transfer pricing system that allows
a selling division to record the transfer of goods or
services at one price (e.g., a market or negotiated market
price) and a buying division to record the transfer at another
price (e.g., a cost-based amount)

relevant range

the specified range of activity over which a
variable cost per unit remains constant or a fixed cost remains
fixed in total; it is generally assumed to be the normal
operating range of the organization

Forward rate

The future interest rate of a bond inferred from the term
structure, especially from the yield curve of zero-coupon bonds, calculated from
the growth factor of an investment in a zero held until maturity.

Loss carryforward

The offsetting of a current year loss against the reported taxable
income for future years.

forward contract

Agreement to buy or sell an asset in the future at an agreed price.

forward rate of exchange

Exchange rate for a forward transaction.

Forward Exchange Market

A market in which foreign exchange can be bought or sold for delivery (and payment) at some specified future date but at a price agreed upon now.

Forward buying

The purchase of items exceeding the quantity levels indicated
by current manufacturing requirements.

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