What Is the Purpose of a Credit Forward Agreement

question 36

Multiple Choice

What is the purpose of a credit forward agreement?

• A)To allow property-casualty insurers to hedge the extreme losses that occur after major catastrophes.
• B)To adjust prices on outstanding futures each day to reflect current futures market conditions.
• C)To facilitate the future exchange of an asset for cash at a price that is determined daily.
• D)To hedge a cash asset on a direct dollar-for-dollar basis with a forward or futures contract.
• E)To hedge against an increase in the default risk of a loan.

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Definitions:

Mild Intellectual Disability

A level of intellectual disability (IQ between 50 and 70) at which people can benefit from education and can support themselves as adults.

Socioeconomic Class

A division of a society based on social and economic status, often influencing access to resources and opportunities.

Mild Intellectual Disability

A condition characterized by slightly below-average intellectual functioning, along with difficulties in adaptive behaviors such as daily living skills.

Intellectual Disability

A disability characterized by significant limitations both in intellectual functioning and in adaptive behavior, manifesting before the age of 18.