The Seller of a Forward Contract Has an Obligation to _____

question 72

Multiple Choice

The seller of a forward contract has an obligation to _____ and _____.

• A) Make delivery; accept payment for the goods.
• B) Take delivery; accept payment for the goods.
• C) Take delivery; pay for the goods.
• D) Make delivery; pay for the goods.
• E) Make delivery; accept the spot price on that date.

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Definitions:

Maturity Dates

The specific dates on which a financial instrument such as a bond, loan, or fixed income instrument becomes due and is to be paid off.

95-Day Note

A financial instrument specifying repayment of a loan or debt within 95 days.

5-Month Note

A short-term financial instrument that matures or is due for payment in five months.

Calculating Interest

The process of determining the cost of borrowing money or the earnings from lending money, based on the principal amount, rate, and time period.