Which One of These Statements Related to Forward Contracts Is

question 6

Multiple Choice

Which one of these statements related to forward contracts is correct?

• A) The buyer of a forward contract on corn benefits if the price of corn increases during the contract period.
• B) The buyer of a forward contract has the right, but not the obligation, to execute the contract any time up to and including the settlement date.
• C) Forward contracts cannot be sold but must be executed by the original parties to the contract.
• D) Forward contracts recognize profits and losses on a daily basis.
• E) The price at which a forward contract closes is set equal to the closing spot price on the settlement date.

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Definitions:

Secretory Vesicles

Membrane-bound vesicles containing substances that are to be secreted or transported out of the cell.

Plasma Membrane

The biological membrane that separates the interior of all cells from the outside environment, regulating the passage of substances in and out of cells.

Receptor-Mediated Endocytosis

A process by which cells internalize molecules (e.g., hormones, nutrients) by the inward budding of plasma membrane vesicles containing proteins with receptor sites specific to the molecules being internalized.

Exhibits Specificity

Describes the quality of being precise or particular in the interaction, such as the way enzymes selectively bind to specific substrates.