Which of the following is true of forward and spot rates?

Question

Quizplus · Accepted Answer

Option A is false because the premium or discount can vary widely depending on various factors like interest rates, inflation, economic situation, etc. Option B is false because spot transactions occur in the current market and not on organized exchanges, whereas forward transactions can be organized or over-the-counter. Option C is true because forward contracts are usually designed for short-term periods ranging from one to six months, although this can vary based on the needs of the counterparties involved. Option D is false as one option is true.

Which of the Following Is True of Forward and Spot