spot exchange rate

(noun)

the agreed upon price of buying one currency in terms of another now

Related Terms

Examples of spot exchange rate in the following topics:

  • Chapter Questions

    • These transactions will occur in 30 days, and the spot currency exchange rate equals $1.25 per euro.
    • Moreover, you expect the U.S. dollar euro exchange rate to fluctuate 15%.
    • Your company uses the spot exchange rate, which equals $0.9 / 1 CD.
    • Your company enters a three-month forward rate that fixes the exchange rate to $1 / 1 CD
    • Your company decides to use the spot exchange rate, which equals $1 / 11 pesos.

  • Measuring and Protecting against Transaction Exposure

    • Spot exchange rate equals $1.762 per 1 pound, and the company will use the spot exchange rate in 90 days.
    • Strategy 1: Trident does nothing, and it exchanges funds using the spot exchange rate.
    • Forward contract is better than the future spot exchange rate.
    • Spot exchange rate equals 7.0 quetzals per $1.
    • Unfortunately, the spot exchange rate entails an exchange rate risk.

  • Interest Rate Parity Theorem

    • Currency spot exchange rate at time t is S.
    • Consequently, the investor exchanges the U.S. dollars for Malaysian ringgits at the spot exchange rate.
    • If the spot U.S. dollar-Malaysian ringgit exchange rate equals $0.3333 per ringgit, then we price a six-month forward contract for $0.3366 per ringgit.
    • At time t, we exchange one unit of foreign currency for the domestic currency; therefore, we multiply by the spot exchange rate S.
    • Spot exchange rate is $0.0127 per yen while a one-year forward contract equals $0.0120 per yen.

  • A Random Walk

    • Value of the spot exchange rate today is st, which equals yesterday's exchange rate, st-1, plus a random disturbance, et.
    • For example, if the U.S. dollar-euro exchange rate equals $1.3 per euro today, then we expect the exchange rate to be $1.3 per euro tomorrow plus a random fluctuation.
    • We show the monthly U.S. dollar-euro exchange rate in Figure 1.
    • A first difference is we take today's spot exchange rate and subtract the previous period, which is monthly for our case.
    • First difference of the U.S. dollar per euro exchange rate

  • Answers to Chapter 19 Questions

    • First, the company has an exchange rate risk.
    • Third, the company borrows 4,938,271.60 CD today, and it would transfer $ 4,444,444.44 today using the spot exchange rate.
    • First, the company has an exchange rate risk.
    • Third, the company needs 495,458.30 pesos to deposit today, and it would transfer $45,041.66 today using the spot exchange rate.
    • It has two sources of variation: Fluctuations in the exchange rate and the sensitivity of the asset's price to changes in the exchange rate.

  • Introducing Exchange Rates

    • In finance, an exchange rate between two currencies is the rate at which one currency will be exchanged for another.
    • In finance, an exchange rate (also known as a foreign-exchange rate, forex rate, or rate) between two currencies is the rate at which one currency will be exchanged for another.
    • The spot exchange rate refers to the current exchange rate.
    • The forward exchange rate refers to an exchange rate that is quoted and traded today, but for delivery and payment on a specific future date.
    • Explain the concept of a foreign exchange market and an exchange rate

  • Chapter Questions

    • You believe the Malaysian ringgit-U.S. dollar exchange rate follows a random walk.
    • If the exchange rate equals 3 rm per U.S. dollar yesterday, what is your best forecast for the exchange rate today?
    • Using the approximation, how much should the exchange rate change if the home interest rate is 10%, the foreign interest rate equals 5%, and you plan to invest for 180 days?
    • Foreign interest rate equals 16%, and the exchange rate is appreciating at 4% per year.
    • If the spot exchange rate is S = 0.7 € / $1, estimate the approximate price of a forward contract due in six months.

  • International Exchange of Money

    • In finance, an exchange rate (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies is the rate at which one currency will be exchanged for another.
    • For example, an interbank exchange rate of 91 Japanese yen (JPY, ¥) to the United States dollar (US$) means that ¥91 will be exchanged for each US$1 or that US$1 will be exchanged for each ¥91.
    • The spot exchange rate refers to the current exchange rate.
    • The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date .
    • In finance, an exchange rate (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies is the rate at which one currency will be exchanged for another.

  • Spot Rates, Forward Rates, and Cross Rates

    • Spot & forward rates are settlement prices of spot & forward contracts; cross rates are the exchange rate between two unofficial currencies.
    • The settlement price (or rate) is called a "spot price" or "spot rate. "
    • In other words, spot rates can be used to calculate forward rates.
    • A cross rate is the currency exchange rate between two currencies, both of which are not the official currencies of the country in which the exchange rate quote is given in.
    • However, if the exchange rate between the euro and the U.S. dollar were quoted in that same newspaper, it would not be considered a cross rate because the quote involves the U.S. official currency.

  • Futures and Forward Contracts

    • Futures and forward contracts can reduce exchange rate risk.
    • Exchange rates between countries fluctuate continually.
    • Who pays the margin if the exchange rate changes to $1 = 4 ringgits?
    • Unfortunately, Exxon has U.S. dollars, and it contracted to pay a lower exchange rate.
    • Who pays the margin if the exchange rate changes to $1 = 2 ringgits?