Explain the Difference Between Spot Exchange Rates and Forward Exchange

question 42

Essay

Explain the difference between spot exchange rates and forward exchange rates.Briefly explain how the forward exchange market works.

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Definitions:

Bootstrap Distribution

The distribution of a large number of bootstrap samples' statistics, used for estimating the shape of the true distribution of a statistic.

Normal

A term often used to describe data following a bell-shaped, symmetrical distribution around a central value, with predictable patterns as far as spread and outliers.

Bootstrap Distribution

A technique in statistics for estimating the distribution of a statistic by resampling with replacement from the original sample.

Normal

In statistics, this describes a distribution that is symmetric around the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.