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All main topics / Finance & Investment / Derivatives / Derivatives
1
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.
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.
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Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015

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