An investor engaging in a transaction whereby he or she contracts to purchase British pounds one year from now is an example of a spot market transaction.

Question

Quizplus · Accepted Answer

This statement is false. An investor contracting to purchase British pounds one year from now is an example of a forward market transaction, not a spot market transaction. In a spot market transaction, the exchange of asset and payment occurs immediately or within a very short period of time, usually two business days.

An Investor Engaging in a Transaction Whereby He or She