Which of the Following Is True for Forward Contracts

question 59

Multiple Choice

Which of the following is true for forward contracts?

• A)They have standardized terms.
• B)They have clearinghouses that guarantee the transactions.
• C)They are private contracts between two parties.
• D)The parties involved have a zero risk of defaulting on a contract.
• E)They are marked-to-market daily.

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Definitions:

Role Senders

Individuals or groups that have expectations about the behavior and performance of others in specific positions.

Directly Affected

Individuals or entities that experience the immediate consequences or benefits of an action or decision.

Economic Responsibility

The obligation of an organization to act in ways that serve both its own interests and the interests of its stakeholders, ensuring its actions maintain or enhance the economic status and conditions of its stakeholders.

Social Responsibility

The obligation of organizations or individuals to act in ways that benefit society at large, beyond their own interests or profits.