A Forward Contract in Foreign Currencies Is an Agreement to Exchange

question 12

Multiple Choice

A forward contract in foreign currencies is an agreement to exchange:

• A)currencies in the future, at an unspecified date, at an exchange rate agreed when the contract is traded
• B)currencies in the future, at a specified date, at whatever the spot rate is at that future date
• C)currencies in the future, at an unspecified date, at an unknown exchange rate
• D)a product for foreign currency, in the future, at a specified date
• E)currencies in the future, at a specified date, at an exchange rate agreed when the contract is traded.

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Definitions:

Pareto Diagram

A graphical tool used for decision-making that highlights the most significant factors in a data set according to the Pareto principle.