The Buyer of a Forward Contract

question 68

Multiple Choice

The buyer of a forward contract:

• A)Will be taking delivery of the good(s) today at today's price.
• B)Will be making delivery of the good(s) at a later date at that date's price.
• C)Will be making delivery of the good(s) today at today's price.
• D)Will be taking delivery of the good(s) at a later date at pre-specified price.
• E)Both A or D.

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Definitions:

Accounting Definition

Refers to the systematic process of recording, measuring, and communicating information about financial transactions.

Financial Resources

Assets in the form of cash, credit, or other financial assets that are available to an individual or organization for use.

Total Economic Cost

The sum of explicit and implicit costs associated with a business activity or decision, considering both direct financial outlays and opportunity costs.