Question : What is the term used to describe the rate at which one currency can be exchanged for another immediately, without any delay?
Option 1: Spot exchange rate
Option 2: Forward exchange rate
Option 3: Nominal exchange rate
Option 4: Real exchange rate
Correct Answer: Spot exchange rate
Solution : The correct answer is (a) Spot exchange rate.
The spot exchange rate refers to the rate at which one currency can be exchanged for another currency immediately, or "on the spot." It is the current market price at which currencies are bought and sold in the foreign exchange market. The spot exchange rate is determined by the supply and demand dynamics of the currency market and can fluctuate continuously throughout the trading day.
The spot exchange rate is used for immediate transactions, such as converting currency for travel or conducting international business transactions that require immediate settlement. It is typically quoted with two currency codes, indicating the amount of one currency needed to buy one unit of another currency.
Question : What is the term used to describe the rate at which one currency can be exchanged for another in the spot market?
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Question : The rate at which one currency can be exchanged for another in the future is known as the ________ exchange rate.
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