The 'Spot Rate' Is

question 3

Multiple Choice

The 'spot rate' is:

• A) The rate for delivery the next day of currencies to be exchanged.
• B) The exchange rate for immediate delivery of currencies to be exchanged.
• C) Only used in relation to metals - i.e., the spot metal price.
• D) Can never be used in translating the accounts of foreign operations.
• E) The exchange rate pre-specified in a forward rate agreement.

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Definitions:

Check Amount

The check amount is the sum of money written on a check that the drawer directs the bank to pay the payee.

Postdated Check

A postdated check is a check written with a future date, indicating when it can be deposited or cashed.

Insufficient Funds

A situation where an account does not have enough money to cover a transaction, resulting in rejection or fees.

Dishonored Check

A check that a bank refuses to honor or pay because the account holder does not have sufficient funds.