Spot rates are contracts that provide for two parties to exchange currencies on a future date at an agreed upon exchange rate.

Question

Quizplus · Accepted Answer

Spot rates are actually the exchange rates for a currency pair at the current moment. They involve immediate delivery of the exchanged currencies and do not involve a future date. The definition in the question refers to forward contracts, which are agreements to exchange currencies at a future date at a predetermined exchange rate.

Spot Rates Are Contracts That Provide for Two Parties to Exchange