The Difficulties Associated with Forward Contracts Can Be Eliminated By

question 36

Multiple Choice

The difficulties associated with forward contracts can be eliminated by:

• A) mandating a minimum amount to be paid by the buyer.
• B) developing standardized weights, definitions, and expiration dates.
• C) reducing the possibility of hedging and speculation.
• D) reducing the liquidity of the forwards market.

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Definitions:

Partnership

A business structure where two or more individuals manage and operate a business in accordance with the terms and objectives set out in a Partnership Agreement.

Finance Department

The division within a company that manages and oversees financial operations, including budgeting, forecasting, and investment analysis.

Corporate Form

A legal structure for businesses characterized by the business being considered a separate legal entity from its owners or shareholders.

Limited Liability

Limited liability is a form of legal protection for shareholders and owners that limits their loss to the amount invested in the company.