What is the term for the anticipated interest rate that applies to a security starting at a future date?

Financial Markets and Funds MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
Financial Markets and Fundsfinance-mcqs › financial-markets-and-funds
Published
12 May 2023
Last updated
28 May 2026

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Explanation

The forward rate refers to the expected interest rate agreed upon today for a loan or investment that will begin at a specified point in the future. This distinguishes it from rates like the backward rate or other terms which do not capture this future-oriented expectation.

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