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What is the difference between a forward contract and a spot rate?

April 26, 2017contract difference forward rate spot

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What is the difference between a forward contract and a spot rate?

1 Answer

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10 Posted

A spot transaction is an agreement to buy or sell a currency at the current market exchange rate. A forward contract is an agreement to buy or sell currency for a date in the future (i.e. locking in a rate today for a payment in the future).