ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The quickest method of exchanging currencies is transacting in spot market. In spot transactions, the currencies exchange is settled between buyer and seller within 2 days of the deal. In case of spot transactions, the currencies are exchanged at the existing rate called as Spot Exchange Rate.

Detailed explanation-2: -Spot Market These are the quickest transactions involving currency in the foreign exchange market. This market provides immediate payment to the buyers and sellers as per the current exchange rate.

Detailed explanation-3: -The spot exchange rate is the current amount one currency will trade for another currency at a specific point in time. It is the open market price that a trader will pay to buy another currency.

Detailed explanation-4: -In general, a spot rate refers to the current price or bond yield, while a forward rate refers to the price or yield for the same product or instrument at some point in the future. In commodities futures markets, a spot rate is the price for a commodity being traded immediately, or “on the spot".

Detailed explanation-5: -What Is a Spot Exchange Rate? A spot exchange rate is the current price at which a person could exchange one currency for another, for delivery on the earliest possible value date. Cash delivery for spot currency transactions is usually the standard settlement date of two business days after the transaction date (T+2).