Mr.Black has agreed to a currency exchange with Mr.White.The parties have agreed to exchange C$12,500 for $10,000 with the exchange occurring 4 months from now.This agreed-upon exchange rate is called the:

Question

Quizplus · Accepted Answer

The agreed-upon exchange rate occurring in the future is known as the forward rate. Option A, the spot rate, is the current exchange rate for immediate delivery of currencies. Option B, the swap rate, refers to the cost or rate for exchanging one currency for another in a swap transaction. Option D, the parity rate, is a term used to describe a situation when two currencies have the same value. Option E, triangle rate, does not exist as a term in currency exchange.

MrBlack Has Agreed to a Currency Exchange with Mr