A foreign exchange forward contract ________. a. Is a standardized contract that is inflexible b. Occurs when
Question:
A foreign exchange forward contract ________.
a. Is a standardized contract that is inflexible
b. Occurs when a company swaps its translation exposure for transaction exposure
c. Is a contractual agreement between two parties to exchange a specified amount of currencies on a future date
d. States the date on which a trade will take place, but the price for the trade will be determined at the time the trade occurs
Step by Step Answer:
The correct answer is C Is a contractual agreement between two parties to exchange a specified amoun...View the full answer
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A forward exchange contract (FEC) is an agreement between two parties to effect a currency transaction, usually involving a currency pair not readily accessible on forex markets. FECs are traded OTC with customizable terms and conditions, many times referencing currencies that are illiquid, blocked, or inconvertibl
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