A Disadvantage of Forward Contracts Is That

question 47

Multiple Choice

A disadvantage of forward contracts is that

• A)there is a possibility that one party to the agreement may default.
• B)sellers are prevented from hedging.
• C)buyers are prevented from hedging.
• D)sellers are prevented from speculating.

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Definitions:

Allport

Refers to Gordon Allport, an American psychologist known for his theory of personality traits.

Central Traits

Fundamental personality characteristics that are considered core to an individual's identity, according to Allport's theory.

Grace

A quality of acting with kindness, compassion, and care, often without expecting anything in return.

Psychologically Healthy

Refers to the state of mental well-being where individuals realize their own abilities, can cope with the normal stresses of life, work productively, and contribute to their community.