The Type of Rate That Quotes the Rate Used in a Forward

question 11

Multiple Choice

The type of rate that quotes the rate used in a forward contract when settlement is more than two business days after the transaction is called:

• A) \(\text { value today }\)
• B) \(\text { value tomorrow }\)
• C) \(\text { spot rate }\)
• D) \(\text { forward rate }\)

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Definitions:

Cheques

Cheques are financial instruments that order a bank to pay a specific amount of money from a person’s account to the person in whose name the cheque has been issued.

Deposit

Money placed in a financial institution for safekeeping, which can earn interest and is often used to secure transactions.

Balance

The total amount of funds in an account or the difference between the total debits and credits in an account.

Account

A record summarizing all the transactions pertaining to a single thing in the accounting world, such as a specific person, a business entity, or a specific asset.