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Basic Question 0 of 8
An off-market forward contract is defined as a forward contract that ______
B. has a value other than zero at inception.
C. is closed by both parties before the contract expiry date.
A. does not trade on the market.
B. has a value other than zero at inception.
C. is closed by both parties before the contract expiry date.
User Contributed Comments 2
| User | Comment |
|---|---|
| Sagarsan88 | I thought swaps and fwds have value of zero at inception? |
| Fraser1997 | The swap itself has a value of zero, but the implied FRA for each individual period does not necessarily have a value of zero |
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
Learning Outcome Statements
describe how interest rate swaps are priced, and calculate and interpret their no-arbitrage value;
CFA® 2025 Level II Curriculum, Volume 5, Module 31.