The number of U.S. dollars ($) today to buy one U.K. pound (£) six months from now is called:
A) the spot rate.
B) the exact rate.
C) the forward rate.
D) the prime rate.

Question

Quizplus · Accepted Answer

The forward rate is the rate at which currencies can be exchanged at some future date. In this case, it specifies the price of purchasing one pound six months from now in U.S. dollars. The spot rate, on the other hand, is the current exchange rate. The other options (exact rate and prime rate) are not related to currency exchange rates.

The Number of U