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mr_godi [17]
3 years ago
11

"Between two major​ currencies, the spot exchange rate is the rate"​ ________ and the forward exchange rate is the rate​ _______

_. A. on that​ date; today B. on that​ date; at some specified future date C. at some specified future​ date; on that date D. ​today; on that date
Business
1 answer:
gogolik [260]3 years ago
4 0

Answer:

B. <u>on that date</u>; <u>at some specified future date</u>

Explanation:

Spot rate refers to the exchange rate between two currencies prevailing as on that particular date when the exchange rates are inquired with a purpose to hedge the future risk owing to exchange rate fluctuations. For example,

1 CHF =  USD 1.01

A forward rate on the other hand refers to the exchange rate provided today which would be applicable on a specified future date. For example, if a UK exporter visits his bank to know the 6 month forward rate to cover his export exposure.

Forward contracts are for the purpose of hedging or risk reduction which may arise in future on account of currency rate fluctuations.

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Read 2 more answers
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