question 1 (1 point)\nlisten\nyouve agreed to a transaction with your bank in which you will buy 100 usd in…

question 1 (1 point)\nlisten\nyouve agreed to a transaction with your bank in which you will buy 100 usd in exchange for c$108 tomorrow. what is this kind of transaction referred to in the foreign exchange market?\nlong dated fx contract\nspot foreign exchange contract.\nforward foreign exchange contract.\nforeign exchange futures contract.

question 1 (1 point)\nlisten\nyouve agreed to a transaction with your bank in which you will buy 100 usd in exchange for c$108 tomorrow. what is this kind of transaction referred to in the foreign exchange market?\nlong dated fx contract\nspot foreign exchange contract.\nforward foreign exchange contract.\nforeign exchange futures contract.

Answer

Brief Explanations:

A forward foreign - exchange contract is an agreement to exchange currencies at a future date at a pre - agreed exchange rate. Here, the transaction is set for tomorrow with a pre - determined rate of C$108 for 100 USD. A long - dated FX contract usually has a longer time horizon than just one day. A spot foreign exchange contract is for immediate settlement (usually within two business days). Foreign exchange futures contracts are standardized and traded on exchanges, while this seems to be a customized over - the - counter agreement.

Answer:

C. Forward foreign exchange contract