What are Spot Contracts?


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Spot contracts :
A foreign exchange transaction which involves settlement of currencies on the second
working day after the contract date is called a spot contract and the rate applicable to such
contracts is called the spot rate. The Spot rate represents the standard conversion value
between a given pair of currencies which is indicative of the relative strength and
weakness of the respective currencies. Rates for all other settlement maturities are
derived from the spot rate by adding or subtracting of factor called swap margin. The
increase or decrease in the spot rate indicates the appreciation or depreciation in the base
currency. Such contracts are represented as C + 2.


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MT UVA BMS

MT UVA- University, Vocational and Affiliated Education for BMS

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