The type of contract which involves the immediate exchange of funds and assets is classified as __________?
Correct answer: A. spot contract
- A. spot contract
- B. forward contract
- C. future contracts
- D. present contractFinancial Planning & Management
Explanation
A spot contract involves the immediate exchange of the asset and payment. Forward and futures contracts arrange delivery for a later date.
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About Business Finance
Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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