Which One of the Following Statements Concerning Forward Trades Is

question 122

Multiple Choice

Which one of the following statements concerning forward trades is correct?

• A) A forward trade is an agreement between parties to exchange a predetermined amount of currency at a rate to be determined in the future.
• B) The forward market provides a mechanism whereby firms can eliminate the collection float associated with foreign trade.
• C) The spot rate is always more favourable that the forward rate.
• D) Forward trades normally settle in two years or less.
• E) The exchange rate on a 90-day forward trade is established at the time of the trade but the currencies do not exchange hands until the end of the 90 days.

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Definitions:

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A diplomatic concept aimed at promoting equal opportunities for international trade and commerce for all nations, particularly in relation to China in the late 19th and early 20th centuries.