An obligation to purchase a specific amount of currency at a specific exchange rate at a future point in time is called a:

Question

An obligation to purchase a specific amount of currency at a specific exchange rate at a future point in time is called a:​

Quizplus · Accepted Answer

The description provided is that of a forward contract, which obligates a buyer to purchase a specific amount of currency at a predetermined exchange rate on a future date. Therefore, the correct answer is D) forward contract. Neither A, B, C, nor E describes the scenario described in the question.

An Obligation to Purchase a Specific Amount of Currency at a Specific