What is a spot exchange-rate contract? What will be an ideal response

What is a spot exchange-rate contract?

What will be an ideal response?

ANSWER

Answer: A spot exchange-rate contract is one that trades within forty eight hours. During the first 24 hours, buyers and sellers agree on the terms. The next 24 hours the traders must provide the currency in question and the funds to settle the contract. Due to time zone differences, the second 24 hours is often necessary to complete the transaction.