A Forward Contract

question 116

Multiple Choice

A forward contract:

• A) Requires that payment in full be made when the contract is initially written.
• B) Provides the buyer with an option to buy an asset on the settlement date at the forward price.
• C) Is a binding agreement which nets out as a zero sum game.
• D) Is marked to the market daily.
• E) Allows for immediate delivery at an agreed upon price which is to be paid on the settlement date.

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Definitions:

Qualified Personnel

Refers to individuals who are officially recognized as being skilled or competent in their profession or occupation through education, training, and experience.

Hierarchy

A system of organizing or classifying people, entities, or concepts based on levels of importance, authority, or status.

Bureaucracy

An organizational structure characterized by hierarchical authority, a clear division of labor, explicit rules, and impersonality in personnel matters.

Authority

The legitimate or socially approved use of power, often associated with roles or positions held by individuals or institutions.