A major difference between the spot market and the forward market is that the spot market deals with:
A) The immediate delivery of currencies
B) The merchandise trade account
C) Currencies traded for future delivery
D) Hedging of international currency risks

Question

Quizplus · Accepted Answer

The spot market deals with the immediate delivery of currencies, while the forward market deals with currencies traded for future delivery. Therefore, option A is the correct choice. Option B refers to the trade of goods and services, not currencies. Option C refers to the forward market, not the spot market. Option D is a general function of both the spot and forward markets, and does not differentiate between the two.

A Major Difference Between the Spot Market and the Forward