When two parties agree to exchange currency and execute the deal immediately,the transaction is referred to as _____.

Question

Quizplus · Accepted Answer

The transaction described in the question is known as spot exchange. In spot exchange, two parties agree to exchange currency at the current exchange rate and execute the deal immediately. Forward exchange involves an agreement to exchange currency at a future date, while countertrade involves the exchange of goods and services instead of currency. Arbitrage involves taking advantage of discrepancies in exchange rates between different markets. Currency swap involves exchanging one currency for another and then exchanging back at a later date.

When Two Parties Agree to Exchange Currency and Execute the Deal