Settlement Date in a Forward Contract Means

question 38

Multiple Choice

Settlement date in a forward contract means:

• A)the contracted party that exchanges one item for another for a predetermined price at a predetermined point in time.
• B)forward prices are always higher than spot prices.
• C)spot prices are always higher than forward prices.
• D)the future date on which the buyer pays the seller and the seller delivers the assets to the buyer.

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Definitions:

Business Processes

A set of tasks and activities that are sequentially organized to achieve a specific organizational goal or objective.

Independent Events

Two or more events where the occurrence of one does not affect the probability of the others.

Normal Distribution

A bell-shaped probability distribution that is symmetric about the mean, describing how continuous data is dispersed around the average value.

Standard Deviation

A gauge for determining the level of difference or scattering in a series of amounts.