A forward currency transaction:Select one:a.Is Always At A Premium Over The Spot Rateb.Means That Delivery And Payment Must Be Made Within One Business Day (Usa/Canada) Or Two Business Days After The Transaction Datec.Calls For Exchange In The Future Of Currencies At An Agreed Rate Of Exchanged.Sets The Future Date When Delivery Of A Currency Must Be Made At An Unknown Spot Exchange Rate
Question
A forward currency transaction:Select one:a.Is Always At A Premium Over The Spot Rateb.Means That Delivery And Payment Must Be Made Within One Business Day (Usa/Canada) Or Two Business Days After The Transaction Datec.Calls For Exchange In The Future Of Currencies At An Agreed Rate Of Exchanged.Sets The Future Date When Delivery Of A Currency Must Be Made At An Unknown Spot Exchange Rate
Solution
A forward currency transaction is an agreement that involves the exchange of currencies at a future date at an agreed-upon exchange rate. It is important to note that a forward currency transaction does not necessarily mean that delivery and payment must be made within one or two business days after the transaction date. The timing of delivery and payment can vary depending on the terms of the agreement. Additionally, a forward currency transaction does not set the future date when delivery of a currency must be made at an unknown spot exchange rate. The exchange rate is agreed upon in advance, eliminating the uncertainty of the spot exchange rate at the time of delivery.
Similar Questions
Which statement is correct?Question 7Select one:a.Transactions in FX market can be executed 24 hours a day b.Forward transaction represents a commitment to deliver or buy currency at some future date at the price established at that datec.Forward transaction represents only the right but not the commitment d.According to the spot transaction arrangements, exchange rate is established today for the delivery in three business days from todaye.Tom transaction represents an exchange of foreign currency for the domestic stock with settlement and delivery tomorrow
In the foreign exchange market, a spot transaction entails thea.the transfer of bank deposits at a predetermined later period.b.the trading of exports and imports at a predetermined time in the futurec.a prompt (within two days) export-import interchanged.an immediate (within two days) bank deposit swap
A transaction in which the currencies to be exchanged the next day of the transaction is known asSelect one:a.Ready transactionb.Value todayc.Spot transactionsd.Value tomorrow
The transaction where the exchange of currencies takes place two days after the date of the contract is:Select one:a.Ready transactionb.Value todayc.Spot transactionsd.Value tomorrow
A bank has to submit a quote to a customer for buying Euro against Rupees. Thecustomer will have the option of taking delivery any time during the second month. Given thefollowing spot and forward rates, what rate should it quote? EUR/INRUSD/INR Spot : 55.20/55.30One month forward : 15/25Two month forward : 20/30EUR/USD Spot : 1.21/1.22One month forward : 15/10Two month forward : 20/15
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