It is a technique used to control the risk in financial assets. Dili has a professional qualification in Management and Financial Accounting. Feedback: p. 382: Money market trading occurs over the counter. In such a setting, both equities and bonds can lose money at the same time, meaning . const url = `${window.location.pathname}${window.location.search}`; "),a=0;a'; Its nice that you always know how much youll pay in the future. A forward contract is an agreement between two parties to trade a specific quantity of an asset for a pre-specified price at a specific date in the future. Uncovered interest rate parity (UIP) states that the difference in two countries' interest rates is equal to the expected changes between the two countries' currency exchange rates. Decrease, or credit the Cash account by the amount of the forward rate. Then, record the difference between the forward rate and the current market value as an additional credit or debit to the Cash account. 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