An agreement to exchange dollar bank deposits for euro bank deposits in one month is a

Question

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A forward transaction is an agreement between two parties to exchange currencies at a future date and at a predetermined exchange rate. In this case, the exchange is from dollar to euro bank deposits in one month, which constitutes a forward transaction. A spot transaction involves the immediate exchange of currencies at the current exchange rate, while a future transaction involves the exchange of currencies at a future date but the exchange rate is determined by the market at the time of the transaction. A deposit transaction refers to the process of placing money in a bank account.

An Agreement to Exchange Dollar Bank Deposits for Euro Bank