Which of the following factors is likely to influence market participants' decisions in the foreign exchange market when choosing between spot and forward contracts?

When market participants choose between spot and forward contracts in the foreign exchange market, several factors come into play. One important factor is the current exchange rate, as a favorable rate in the spot market might encourage immediate transactions. Another key consideration is the expected future exchange rates; if participants believe rates will change significantly, they might prefer forward contracts to lock in a rate today for future transactions. For example, if a company expects the value of a currency to drop in the coming months, it might choose a forward contract to secure a better rate now. Overall, these decisions are influenced by market predictions, risk tolerance, and the timing of cash flows.