The _____ Is the Exchange Rate at Which a Buyer

question 65

Multiple Choice

The _____ is the exchange rate at which a buyer and a seller agree to transact a currency at some date in the future.

• A)currency futures contract
• B)currency swap
• C)forward exchange rate
• D)spot rate
• E)cross rate

---

Definitions:

Fair Value Hedge

A financial hedge that is used to mitigate the risks associated with the changes in the fair value of assets or liabilities or an identified portion of such assets or liabilities.

Discount Recognized

Discount Recognized refers to the process of acknowledging a reduction from the nominal value of a financial instrument when it is realized or accounted for.

Foreign Exchange Gain

A profit arising from an increase in the value of one currency relative to another in the foreign exchange markets.