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Basic Question 2 of 2
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 using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
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.