The Spot Market

question 48

Multiple Choice

The spot market

• A)involves the almost-immediate purchase or sale of foreign exchange.
• B)involves the sale of futures,forwards,and options on foreign exchange.
• C)takes place only on the floor of a physical exchange.
• D)all of the options

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Definitions:

Developing-Country

A developing country refers to a nation with a lower level of industrialization, lower living standards, and sometimes a lower Human Development Index (HDI) compared to developed countries.

Compounded Monthly

An interest calculation method where interest is added to the principal sum at the end of each month, with each subsequent month earning interest on the new total.

Nominal Rate

The nominal rate is the stated interest rate on a loan or financial product, not adjusted for inflation.

Monthly Compounding

The process wherein the interest earned on an investment is added to the principal sum every month, and from then on, the interest for future periods is calculated on the new total.