Asked by Allie Spolsdoff on Jul 22, 2024
Verified
What is the exchange rate in effect at the date of the transaction called?
A) Closing rate
B) Spot rate
C) Forward rate
D) Settlement rate
Spot Rate
The current price in the foreign exchange market at which one currency can be exchanged for another currency.
Closing Rate
The closing rate is the exchange rate of a foreign currency against a home currency at the close of the accounting period, used in translating foreign currency financial statements.
Forward Rate
The agreed-upon future exchange rate between two currencies in a forward contract.
- Comprehend the employment of exchange rates (historical rate, spot rate, closing rate) within foreign currency transactions and financial reporting contexts.
Verified Answer
CD
Carly DiagoJul 23, 2024
Final Answer :
B
Explanation :
The exchange rate in effect at the date of the transaction is called the Spot rate.
Learning Objectives
- Comprehend the employment of exchange rates (historical rate, spot rate, closing rate) within foreign currency transactions and financial reporting contexts.