Forward Contracts Do Not Suffer from the Problem of ________

question 39

Multiple Choice

Forward contracts do not suffer from the problem of ________.

• A) a lack of liquidity
• B) a lack of flexibility
• C) the difficulty of finding a counterparty
• D) default risk

---

Definitions:

Regression Discontinuity

Regression discontinuity identifies the causal effects of a policy or factor by looking at two samples that lie on either side of a threshold or cutoff.

Causal Effects

Causal effects refer to the change in an outcome directly attributable to a change in a factor or intervention, established through methods that isolate this relation from other variables.

Threshold

The point at which a particular effect or change occurs, often used in context of quantities or levels.

Intention To Treat

A principle used in clinical trials where all patients including those who drop out or deviate from the protocol are accounted for in the final results.