ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Handles transactions of foreign exchange meant for future delivery
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Handles current transactions
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Handles current as well as future transactions
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None of these
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Detailed explanation-1: -A market in which foreign exchange is bought and sold for delivery at a future date at an agreed rate today is called forward market. It covers transactions which occur at a future date. Exchange rate that prevails in a forward contract for purchase or sale of foreign exchange is called Forward Rate.
Detailed explanation-2: -A forward market is an over-the-counter marketplace that sets the price of a financial instrument or asset for future delivery. Forward markets are used for trading a range of instruments, but the term is primarily used with reference to the foreign exchange market.
Detailed explanation-3: -Forward market deals with foreign exchange transactions that are meant for future delivery.
Detailed explanation-4: -The forward market is the marketplace that sets the price of assets and financial instruments (Bonds, Swaps, Equity, Cap, Futures, Forward rate agreements, Bills of exchange, and so on) for future delivery and is used for financial instrument trading.