The buyer of an appointment contract enters into the contract to protect against a future rise in interest rates. On the other hand, the seller enters into the contract to protect himself from a future interest rate cut. For example, a German bank and a French bank could enter into a semi-annual term rate contract, under which the German bank would pay a fixed interest rate of 4.2% and receive the variable principal rate of 700 million euros. Since FRAs are charged on the settlement date – the start date of the fictitious loan or deposit – liquid severance pay, the interest rate differential between the market interest rate and the FRA contract rate determines the risk for each party. It is important to note that there is no major cash flow, as the amount of capital is a fictitious amount. The format in which the FRAs are listed is the term up to the due date and the due date, both expressed in months and generally separated by the letter “x.” FRAs are paid in cash. The amount of the payment is equal to the net difference between the interest rate and the reference rate, usually liBOR, multiplied by a fictitious capital that is not exchanged, but which is simply used to calculate the amount of the payment. Since the recipient receives a payment at the beginning of the contract period, the calculated amount is discounted by the current value based on the futures price and the contractual period. GPS is like short-term interest rate futures (STIR), but there are some significant differences: on the fixing date (October 10, 2016), the 6-month fixed LIBOR 1.26222, which corresponds to the settlement rate applicable to the company`s FRA. FRAP(R-FRA) ×NP×PY) × (11-R× (PY)) where:FRAP-FRA paymentFRA-Forward rate miss rate, or fixed rate that is paid, or variable interest rate used in the nominal nP-capital contract, or amount of the loan that applies interest on period, or number of days during the term of the contractY-number of days per year based on the correct daily counting agreement for the contract , “Begin” und “””FRAP” = “links” ( “frac” ( R – “Text” left ( links ( , 1 , 1 + R, x , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , oder feste Zinsen, die bezahlt werden, &R = “Text” oder “Floating-Zinssatz”, der in dem Vertrag verwendet wird, &,”Text” &NP = “Text” oder “Notionaler Kapitalbetrag” oder “Betrag” des Darlehens, auf das die Zinsen angewendet werden. , oder Anzahl der Tage in der Vertragslaufzeit , &Y = “Text” (“Anzahl der Tage im Jahr” basierend auf der korrekten Konvention für den Vertrag , “Text” and “Journaltage” for the contract, FRAP(Y (R-FRA) ×NP×P) × (1-R× (YP) 1) where:FRAP-FRA paymentFRA-Forward rate agreement rate, or fixed interest rate paidR-reference, or variable interest rate used in the nominal agreement, or amount of the loan that applies interest over the period of time, or number of days during the term of the contractS-number of days per year based on the correct daily agreement of the contract A determination of the currency may be on a monetary or delivery basis provided that the option is acceptable to both parties and has been specified in the contract.