Futures Contracts Differ from Forward Contracts in That

question 1

Multiple Choice

Futures contracts differ from forward contracts in that

• A) future contracts ensures you will receive a certain amount of foreign currency at a specified future date.
• B) future contracts bind you into your end of the deal.
• C) future contracts allow you to sell your contract on an organized futures exchange.
• D) future contracts are a disadvantage if your views about the future spot exchange rate are to change.
• E) futures contracts don't allow you to realize a profit or a loss right away.

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Definitions:

Inventory Turnover

A financial ratio indicating how many times a company has sold and replaced inventory over a period.

Days' Sales

A financial ratio that measures how efficiently a company uses its inventory by calculating the average number of days the company takes to sell its inventory.

Financial Ratios

Quantitative measures derived from financial statements used to assess a company's performance, financial health, and value.

Current Ratio

An indicator measuring a corporation's potential to handle its short-term financial obligations with assets on hand.