Which of the Following Is a Similarity Between Forwards and Futures

question 15

Multiple Choice

Which of the following is a similarity between forwards and futures?

• A)Both are traded in the over-the-counter market.
• B)Both can be tailored to meet specific customer needs.
• C)Both trade on an exchange with standardized contract specifications.
• D)The prices for both derive from the spot, or cash market, which is "today's" price for a particular asset.
• E)Both are agreements that give the right (but not the obligation) to buy or sell an underlying asset at a specified price at a specified time in the future.

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Definitions:

Needs And Wants

Basic requirements for survival (needs) contrasted with desires that can be fulfilled through purchasing goods and services (wants).

Managerial Accounting

Managerial accounting involves the processes of identifying, analyzing, recording, and presenting financial information that can be used internally by managers for planning, decision-making, and operational control.

Financial Accounting

The field of accounting focused on the summary, analysis, and reporting of financial transactions relating to a business, following standardized guidelines.

Raw Materials Inventory

The total cost of all components that are intended to be used in the production of a product but have not yet been used.