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:

Debt

Money owed by one party, the borrower, to another, the lender; typically involving repayment terms and sometimes interest.

Written Contract

An agreement between parties that is documented in a written form and signed by the parties involved.

Remedy

A legal means of enforcing a right or correcting a wrong.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to a second party if the latter has reasonably relied on that promise to their detriment.