The Difference Between the Spot Contract and a Forward Contract

question 156

Multiple Choice

The difference between the spot contract and a forward contract is that:

• A) the former is a flexible price on the currency, and the latter is a fixed price.
• B) the former is a contract to be settled immediately, and the latter is a contract to be settled at a future agreed-upon date.
• C) the former is a derivative, and the latter is not a derivative.
• D) the former has a fixed price but the contract can be settled at a later date, and the latter is a contract to be settled immediately.

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Definitions:

Natural Law

A philosophy asserting that certain rights or values are inherent by virtue of human nature and can be universally understood through human reason.

Religious Law

A legal system based on the religious doctrines and principles of a faith, guiding the behavior of its followers.

Human Nature

Refers to the distinguishing characteristics, including ways of thinking, feeling, and acting, that humans tend to have naturally, independent of the influence of culture.

Ethical Issues

Situations or topics that involve a conflict between moral imperatives, raising questions about what is right or wrong, good or bad.