Incomplete question. The full question read;
What is the name of the contract where corporations, institutional investors, and individuals are required to pay or to receive a specific amount of foreign currency at a specific exchange rate at a particular date in the future
A) forward currency contract
B) forward foreign exchange market
C) forward rate contract
D) future hedge contract
Answer:
A) forward currency contract
Step-by-step explanation:
In a forward currency contract agreement, there are two parties, and they agree to either pay or to receive a specific amount of foreign currency at a specific exchange rate at a particular date in the future.
For example, company A in the United States is selling $10,000 worth of goods to company B in the United Kingdom. Company B expects to receive the goods two months from now, and since it uses a foreign currency; the British Pounds, they will then agree on the specific exchange rate between £ and $ in advance before the payment date.