Transactions Costs in Forward Contracts Typically Take the Form of a Bid-Ask

question 18

True/False

Transactions costs in forward contracts typically take the form of a bid-ask spread whereas transactions costs on futures contracts are charged as a fee per contract.

---

Definitions:

Silver

A precious metal used for investment, industrial applications, and jewelry, valued both for its monetary and physical properties.

Interest Rate Changes

Variations in the cost of borrowing money, often influenced by central bank policies.

Demand For Money

The desire to hold financial assets in the form of money (cash or bank deposits), driven by transactions, precautionary, and speculative motives.

Credit Crisis Of 2008

An unprecedented financial crisis that peaked in 2008, characterized by the collapse of financial institutions and a severe credit crunch, leading to a global economic recession.