Capital Markets · Sales & Trading

Spot Vs Forward Exchange Rate

This question asks you to distinguish between spot and forward exchange rates in foreign exchange markets.

Interview question
Difficulty
Easy
Topic
Capital Markets
Subtopic
Sales & Trading

What this question trains

This problem practices a core foreign exchange concept, the difference between transacting at the current market rate and locking in a rate for a future currency exchange. Candidates need to understand what each quote represents, when each is used, and how forward contracts help manage currency risk for companies with international exposure. Interviewers ask this because it tests whether you can explain basic market instruments clearly and connect them to practical hedging needs in sales and trading.

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