Physical delivery of foreign exchange has to take place in the case of:

Correct option is B

The correct answer is (b) Spot market 

Explanation:
• The spot market (or cash market) is a public financial market where financial instruments or commodities are traded for immediate delivery.
• In the case of foreign exchange, physical delivery of the currency typically takes place on the spot date, which is usually two business days after the trade date (T+2).
• This contrasts with other markets where delivery occurs at a future date. 

Information Booster:
• The spot market for foreign exchange is the largest financial market in the world.
• "Physical delivery" in this context usually refers to the electronic transfer of funds between the accounts of the involved parties. 

Additional Knowledge:
(a) Forward Market: .
• In the forward market, participants agree today on an exchange rate for a trade that will occur at a specified future date (beyond the spot date), so physical delivery is not immediate. 

(c) Options market: .
• Options give the holder the right, but not the obligation, to buy or sell currency at a set price and time; physical delivery only occurs if the option is exercised. 

(d) Future market: .
• Futures are standardized contracts to buy or sell currency at a specified future date and price; delivery happens on the maturity date of the contract.