Business and Personal Finance Dictionary

# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 

• QUANTO FORWARD
  
  A forward contract in which the buyer receives a random number of units of the underlying , and that number depends on another price. For example, consider a Quanto Forward contract on the Nikkei. The forward price might be a fixed number of dollars, while the number of units of the Nikkei would depend proportional to the yen/dollar exchange rate. This is equivalent to a cash-settled forward contract with a nominal dollar value of the Nikkei proportional to the ratio of its true dollar value to the dollar value of one yen.
  
  Back