Question
Distinguish between the spot and forward foreign exchange markets. Why are transactions in forward foreign exchange markets done?
Answer :
Word Count : 676
| Characteristic | Spot Foreign Exchange Market | Forward Foreign Exchange Market |
|---|---|---|
| Definition | The spot market is where currencies are traded for immediate delivery, typically within two business days. | The forward market is where currencies are traded for future delivery at a predetermined exchange rate on a specific future date. |
| Delivery | Currencies are exchanged on the spot (within two business days). | Currencies are exchanged on a specified future date (the maturity date). |
| Exchange Rate | The exchange rate is determined by current market conditions and is known as the spot rate. | The exchange rate is predetermined and agreed upon by the two parties involved in the forward contract. |
| Liquidity | The spot market is highly liquid, with a large number of participants and high trading volumes. | The forward market is generally less liquid than the spot market, especially for longer maturities and less-traded currency pairs. |
| Participants | Major participants include central banks, commercial banks, investment banks, multinational corporations, and __________ _____ ________ _________ ______. ______ __________ _________ ___ __________. ___ _____ _______ _______ _________ ______ ________. ___ ___ ___ _______ ____ _____ _________ __________ ____ _________. _____ ___ __________ _________ ____ ______ _____ _________ ____ ___. ___ _______ _______ _______ ______ _______ _______ ___. _____ _______ __________ _______ _____ _________ _________ ______ _______ __________. ______ ______ ___ __________ ___ __________ _________ _______ _____. _____ ______ __________ _______ ______ ____ _____ ____ _____. ______ _______ _______ _______ ________. ______ ______ _____ _______ ___ __________ ______. _______ _________ __________ __________ ____ __________ __________. _________ ________ ___ _______ _____ ___ ______ _________ ________ ___. _________ ____ ________ ______ _________. __________ _____ _________ _______ ________ ________. ____ __________ ___ _____ ______ ______ ___ ______. ________ __________ _________ _____ _____ ___ __________ ______ ______ _________. _____ ______ ______ ______ _______ ________ ___ _______. __________ ____ _____ _____ _________ __________ ____ ____ ___ _____ _______. ____ ________ ___ _____ _________ ______ ____ __________ _________ __________ __________ _____. ___ __________ ___ _________ ________ ________ _________ _______. ___ _____ _____ _______ ________ _______ ____ ___. ________ ________ _________ _______ _____ ______ __________ __________. __________ _________ ____ _____ __________ ________ _____. ____ ________ _____ __________ ________ _____. _______ _______ _________ ____ _____ _____ _________ _________ __________ _________. __________ _______ _____ _____ __________ ________ _____. _________ ______ _____ ________ ____ __________ ________ ________ ______ __________ _____ __________. __________ _______ ___ ______ _______ ________. _____ ________ _________ ___ ______ _______ __________ ____ _______ ______ ________ ______. _______ ____ _____ ______ ______ ________ _______ _______ _________ __________ __________ __________. _______ ____ ________ ___ __________ _______ ________ _________. __________ _______ _____ ______ _____ ____ _______ _____ ________ ____ __________ __________. ______ ____ __________ _______ ______. ___ ____ _______ ______ _________ _________. _______ ________ __________ ________ ___ ______. ___ ________ ____ _____ ______ _________ ________. _____ _____ ______ _____ ________ ______ ___ ____ ____. _________ _________ ___ ______ _________. _______ _____ ____ _____ ___. ___ ______ _____ _________ __________. _____ ___ ____ _________ _____ _________ ___ ______. _____ ____ ________ ________ ____ _________ _______ __________ __________. _______ _________ __________ ________ _________ _____ _______ _____ ________. _______ ____ _________ __________ _______ _________ ____ ____ ________ __________. ____ ________ __________ ______ _____ ________. ________ __________ __________ ______ _________. __________ __________ ________ _______ ______. _________ __________ _______ _________ ___ ______ ____. ______ ___ _____ _________ ______ _________ ___ _____ ________. ______ __________ _____ __________ _________. _____ _________ ____ ____ ____ ___ _____ ___ _____ _____. __________ ___ ________ __________ ______ ____ _________ ___ _________ _______ ________ ___. __________ __________ _______ ______ ______. _______ __________ _____ ___ __________ ______ ______ _________ ___ __________ _____ _________. ________ ______ ____ _____ ___ _____ ____ _____. _______ __________ _________ ______ ________ _________ ______ ____ __________. ____ ____ ______ ___ ______ ________ _________ _______ ____ _______ _________. ____ ____ ___ __________ _____ _______ __________ __________. ________ ___ __________ ____ _________ ____. ______ ________ _____ _____ __________ ______ ____ _____ ____ __________. ______ ________ ________ _______ __________ ___ ________ ____ _________ _______ ________. ________ ___ ______ _____ __________ ______. Get Full Answer on WhatsApp IGNOU NEWS Assignment Submission Last Date Extended Till 30 June 2026 Click Here★★★IGNOU June 2026 TEE Date Sheet Released Click Here★★★ Top |