The Spot Market

question 24

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 above.

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Definitions:

Nominal Yield To Maturity

The return an investor expects to earn if a bond is held until its maturity date, without adjusting for inflation.

Semiannual Coupon

A semiannual coupon refers to the interest payment made to bondholders twice a year.

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily reflect its market value.

Coupon Interest Rate

Yearly rate of interest on a bond, denoted as a percentage of its principal value.