Which of the Following Statements Is (Are) Correct About a Forward

question 23

Multiple Choice

Which of the following statements is (are) correct about a forward contract?
I. Forward contracts require a good faith deposit before an agreement can be reached.
II. Forward contracts are considered extremely risky since the price for the asset is determined when the contract matures.

• A) Only statement I is correct.
• B) Only statement II is correct.
• C) Both statements I and II are correct.
• D) Neither statement I nor II is correct.

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