Which of the Following Statements Is NOT Correct Regarding Forward

question 41

Multiple Choice

Which of the following statements is NOT correct regarding forward contracts?

• A)They are typically negotiated with a commercial bank
• B)They are standardized contracts that represent a standard number of units and have a specific maturity date.
• C)They are sometimes referred to in terms of their percentage premium or discount.
• D)They can be used to hedge a corporation's risk that a currency's value may appreciate or depreciate over time.

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Definitions:

Profit and Loss Statements

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time, typically a fiscal quarter or year.

Business Units

Separate operational entities within a corporation, each having distinct tasks and objectives, contributing to the overall strategy of the company.

Shared Service Units

Divisions within a company that provide services to multiple departments, improving efficiency and reducing costs.

Cost Centre

A segment of an organization where costs can be accumulated, but which does not directly generate revenue.