An Agreement to Exchange Currencies at Some Point in the Future

question 293

Multiple Choice

An agreement to exchange currencies at some point in the future using an agreed-upon exchange rate is called a ____________ trade.

• A) Spot.
• B) Forward.
• C) Swap.
• D) Floating.
• E) Triangle.

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Definitions:

Security Agreement

An agreement in which the debtor gives the secured interest to the secured party.

Debtor

An individual or entity that owes money or is under financial obligation to another, typically as a result of borrowing funds or purchasing goods/services on credit.

Collateral

Assets that are offered to secure a loan or other credit and that can be seized by the lender if the loan is unpaid.

Secured Parties

Creditors who have the right to seize collateral if a debtor fails to fulfill their obligation under a secured agreement.