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A US Bank Has an Agreement with a German Bank to to Exchange

Question 32

Multiple Choice
A U.S. bank has an agreement with a German bank to exchange $500,000 for €397,000 on the first day of each of the next three calendar quarters. This agreement is best described as a:

A U.S. bank has an agreement with a German bank to exchange $500,000 for €397,000 on the first day of each of the next three calendar quarters. This agreement is best described as a:


A) floating exchange.
B) spot trade.
C) currency option.
D) futures contract.
E) swap contract.

Correct Answer:

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