Identify the Derivative Tools That Are Agreements to Exchange or Transfer

question 48

Multiple Choice

Identify the derivative tools that are agreements to exchange or transfer expected future variable-price purchases of a commodity or foreign exchange contract for a fixed contractual price today.

• A)Forwards
• B)Futures
• C)Swaps
• D)Options
• E)Coupons

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Definitions:

Demand for Loans

The desire or willingness of individuals or businesses to borrow money from financial institutions at given rates and terms.

Nominal Return

The return on an investment without adjusting for factors like inflation, representing the raw or unadjusted profit or loss.

After-Tax Real Rate

The interest rate after the adjustment for taxes and inflation.