A spot trade is defined as an agreement to exchange currencies based on the exchange rate _____ for settlement within _____ business day(s).

Question

Quizplus · Accepted Answer

A spot trade is a currency transaction in which both parties agree to exchange currencies based on the exchange rate at the time of the trade and settle the transaction within two business days. Choice A is incorrect because settlement is required within two business days, not three. Choice B is incorrect because settlement cannot be one year from today for a spot trade. Choice D is incorrect because settlement is required within two business days, not three. Choice E is incorrect because settlement is required within two business days, not one.

A Spot Trade Is Defined as an Agreement to Exchange