Which statements that are referring to forward market?i. A foreign exchange market for value any time after two good business daysii. It can be higher or lower than the spot rate depending on the interest rates differential between two currencies concernediii. Days exclude holidays and weekendsiv. Two days after transaction date

FOREIGN CURRENCY MARKETS

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

A	i and ii
B	i and iv
C	iii and iv
D	ii and iv

Explanation:

Detailed explanation-1: -What Is a Forward Market? 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-2: -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.

Detailed explanation-3: -C is correct. An agreement to convert one currency into another in the future is a foreign exchange transaction that involves the forward market.

Detailed explanation-4: -7.8 Forward exchange contract means an agreement to exchange different currencies at a forward rate. 7.9 Forward rate is the specified exchange rate for exchange of two currencies at a specified future date.

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ECONOMICS (CBSE/UGC NET)

ECONOMICS

FOREIGN CURRENCY MARKETS