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Which of the following statements is true about a forward foreign exchange contract?
It is a right to buy or sell foreign currency at a specified price within a fixed time period.
It does not require an underlying commercial transaction because the contract trades on its own.
It specifies delivery of currencies at an exchange rate established today for a currency transaction that settles more than two days in the future.
It is an exchange of currencies at the outset of a transaction at a fixed rate determined by the spot markets.
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