Question : What is the term used to describe the rate at which a currency can be exchanged immediately in the spot market?
Option 1: Nominal exchange rate
Option 2: Real exchange rate
Option 3: Cross exchange rate
Option 4: Spot exchange rate
Answer (1)
24th Jan, 2024
Correct Answer: Spot exchange rate
Solution : The correct answer is d) Spot exchange rate
The spot exchange rate represents the current market price at which one currency can be exchanged for another currency for immediate settlement. It is the rate at which currencies are traded for immediate delivery, typically within two business days. The spot exchange rate is widely used in currency conversions for transactions such as international trade, travel, and financial transactions.
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