What kind of trade involves agreeing today on an exchange rate for settlement in 90 days?

Question

Quizplus · Accepted Answer

A forward trade is an agreement between two parties to exchange currencies at a fixed exchange rate on a specified future date, which is typically 30, 60, or 90 days in the future. This allows both parties to hedge against future currency fluctuations and reduces the risk of uncertainty in international trade transactions. A spot trade involves the immediate exchange of currencies at the prevailing market rate, while a futures trade involves buying or selling currencies at a specified price on a future date. Triangle trade is a historical term referring to the trade between Europe, Africa, and the Americas during the colonial era, and is not relevant to currency trading.

What Kind of Trade Involves Agreeing Today on an Exchange