In the 18 × 24 FRA, 24 × 30 FRA, and 30 × 36 FRA, the loan rate is lower than the AR and hence Bharat Alloys
will pay the settlement amount to the FRA dealer.
4.8 Non-deliverable Forwards
Forward contracts generally require delivery of assets in exchange for cash. For example, if you en-
ter into a gold forward contract to sell gold in three months, you need to deliver the gold in exchange
for cash. If you enter into a forward contract to sell U.S. dollars in 60 days, you need to deliver U.S. dol-
lars in exchange for Indian rupees. us, forward contracts require the delivery of assets in exchange for
cash. ...
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