Which of the Following Is NOT a Major Problem with Forward

question 28

Multiple Choice

Which of the following is NOT a major problem with forward contracts?

• A) It is often costly/difficult to find a willing counterparty.
• B) The market for forward contracts is illiquid as they are not easily sold to other parties.
• C) The market is highly regulated.
• D) One party usually has an incentive to break the agreement.

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Definitions:

Economic Development

The process by which a nation improves the economic, political, and social well-being of its people, often through increased industrial activity and improvements in living standards.

Indebtedness

The state of owing money or being under financial obligation to another entity, which can apply to individuals, corporations, or countries.

Global Prices

The standard cost of goods and services determined by the global market, affecting economies worldwide.

Populist Movement

was a political and social movement in the late 19th century United States that sought to represent the interests of farmers and laborers against the economic elite.