The Payment of a Premium When the Contract Is Entered

question 280

True/False

The payment of a premium when the contract is entered represent a difference between an option contract and a forward contract.

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Definitions:

Forced

Compelled or coerced action or decision, often against one's will.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, reflecting the company's brand, customer base, and other non-physical assets.

Restriction

A rule or condition that limits or controls someone's actions or a particular activity.

Business Elsewhere

The decision by a customer to take their business to a competitor or alternative provider, usually due to dissatisfaction.