In the FX markets,the spot exchange rate can be defined as the:
A) exchange rate that is settled within two business days.
B) exchange rate that is settled within five working days.
C) direct exchange rate.
D) exchange rate between two currencies.

Question

Quizplus · Accepted Answer

The spot exchange rate refers to the exchange rate that is settled within two business days in the FX markets. This rate is used for immediate currency exchanges between market participants. Option B is incorrect as there is no settlement period of five working days for spot transactions. Option C and D are also incorrect as the spot exchange rate can be either direct or indirect, and it represents the exchange rate between two currencies.

In the FX Markets,the Spot Exchange Rate Can Be Defined