Forward Commitment

Forward commitment is a pledge to provide a commercial loan at a future date.

A contractual pledge to complete a transaction in the future is known as a forward commitment. The product or goods being sold, the price, the date of payment, and the date of delivery are all specified in a forward commitment. A contractual agreement between two parties to carry out a planned transaction is referred to as a forward commitment.

Forwards, futures, and swaps are all examples of forward commitments. A forward contract is a commitment to buy or sell a commodity at a certain price at a future date. The linear reward function of the forward contract includes both upside and downside risk.

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