Examlex
The ear is generally described as having three distinct divisions.Name the three divisions and describe each.
Spot Exchange Rate
The present rate at which one can purchase or sell a currency for immediate transfer.
Forward Exchange Rate
A contractually fixed exchange rate for the future exchange of currencies at a specified date, used to hedge against foreign exchange risk.
Arbitrage
The simultaneous purchase and sale of the same assets in different markets to exploit price differences for a profit.
Risk-free Rate
The expected yield from an investment that carries no risk of losing money, often identified by the returns on government bonds.
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