What do forward rates mean?
What do forward rates mean? A forward rate is an interest rate applicable to a financial transaction that will take place in the future. The term may also refer to the rate fixed for a future financial obligation, such as the interest rate on a loan payment. Are zero rates and spot rates the same? 1 The spot interest rate for a zero-coupon bond is calculated the same way as the YTM for a zero-coupon bond. The spot interest rate is not the same as the spot price. The method chosen depends on whether the investor wants to hold on...