ECONOMICS
FOREIGN CURRENCY MARKETS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The date both parties deal with each other to perform foreign currency transaction
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Two days after transaction
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Days exclude holidays and weekends
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None of the above
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Detailed explanation-1: -Spot settlement (i.e., the transfer of funds that completes a spot contract transaction) normally occurs one or two business days from the trade date, also called the horizon. The spot date is the day when settlement occurs.
Detailed explanation-2: -A spot trade, also known as a spot transaction, refers to the purchase or sale of a foreign currency, financial instrument, or commodity for instant delivery on a specified spot date.
Detailed explanation-3: -Settlement date The standard settlement timeframe for foreign exchange spot transactions is T+2; i.e., two business days from the trade date.
Detailed explanation-4: -The spot market is where financial instruments, such as commodities, currencies, and securities, are traded for immediate delivery. Delivery is the exchange of cash for the financial instrument. A futures contract, on the other hand, is based on the delivery of the underlying asset at a future date.
Detailed explanation-5: -Solution(By Examveda Team) The spot exchange rate is the rate today for exchanging one currency for another for immediate delivery. The spot exchange rate is the amount one currency will trade for another today. In other words, it’s the price a person would have to pay in one currency to buy another currency today.