A ________ exchange rate is the rate that a firm can tie in for a future transaction date.

Question

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A forward exchange rate is a rate that is set today for a transaction that will occur in the future. It allows a firm to lock in a specific rate for a future date, which can help to manage foreign exchange risk. Fixed exchange rates and pegged exchange rates refer to rates that are set by a government or central bank and do not change regularly, while floating exchange rates are determined by market forces and can fluctuate significantly. Spot exchange rates, on the other hand, apply to transactions that are settled immediately.

A ________ Exchange Rate Is the Rate That a Firm