Risk glossary
Risk glossary
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Target redemption forward (Tarf)
A target redemption forward is a foreign exchange product that allows the holder, usually a corporate, to buy or sell a currency at an enhanced rate for a number of expiry dates, with zero upfront premium. The product automatically expires if the enhanced rate reaches a target level. But if spot moves in the wrong direction, holders can be forced to trade regularly at unfavourable rates for the full life of the product.
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