Which of the following statements holds true for a spot exchange rate? A.It refe

Question

Which of the following statements holds true for a spot exchange rate?

A.It refers to the weighted average of a basket of foreign currencies. B.It refers to the rate at which two parties agree to exchange currency and execute a deal that takes place immediately. C.It refers to the rate that determines the pay-offs in a financial contract and that is outside the control of the parties to the contract. D.It refers to the rate at which two parties agree to exchange currency and execute a deal at some specific point in the future, usually 30 days, 60 days, 90 days, or 180 days in the future. E.It refers to the exchange rate based on the rate in place when the assets and liability were originally acquired or purchased.

Explanation / Answer

Spot rate is the rate at which two parties exchange different currencies at current time or immediately. So Spot rate refers to the rate at which two parties agree to exchange currency and execute a deal that takes place immediately.

hence, Option (B) is correct answer.

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.