A spot contract is a(n):
A) promise to purchase a foreign currency in 30 days.
B) promise to purchase a foreign currency in 90 days.
C) contract for the immediate exchange of currencies.
D) agreement to sell currencies at a fixed price indefinitely.

Question

Quizplus · Accepted Answer

A spot contract is a contract for the immediate exchange of currencies. It is settled within two business days after the transaction is agreed upon. Therefore, choices A, B, and D are incorrect as they refer to contracts for future exchange of currencies or indefinite agreement to sell at a fixed price.

A Spot Contract Is A(n)