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1.A one-year forward contract is an agreement where
A.One side has the right to buy an asset for a certain price in one year’s time.
B.One side has the obligation to buy an asset for a certain price in one year’s time.
C.One side has the obligation to buy an asset for a certain price at some time during the next year.
D.One side has the obligation to buy an asset for the market price in one year’s time.
A.One side has the right to buy an asset for a certain price in one year’s time.
B.One side has the obligation to buy an asset for a certain price in one year’s time.
C.One side has the obligation to buy an asset for a certain price at some time during the next year.
D.One side has the obligation to buy an asset for the market price in one year’s time.
Answer: B
A one-year forward contract is an obligation to buy or sell in one year’s time for a predetermined price. By contrast, an option is the right to buy or sell.
A one-year forward contract is an obligation to buy or sell in one year’s time for a predetermined price. By contrast, an option is the right to buy or sell.
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Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015