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Forward Contracts: CNBC Explains

CNBC Explains
Thursday, 16 Jun 2011 | 9:41 AM ET
Forward Contracts: CNBC Explains
Forward contracts are a mainstay in business, helping companies hedge risk and avoid volatility. Why and how do businesses use forward contracts? Salman Khan of the Khan Academy explains, using a simplified example.

Forward contracts are a mainstay in business, helping companies hedge risk and avoid volatility. Why and how do businesses use forward contracts? Salman Khan of the Khan Academy explains, using a simplified example.

From this video, you’ll understand:

  • The reasons for creating forward contracts
  • How businesses use forward contracts
  • How forward contracts help avoid volatility



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