The ________ Is a Derivative Forward Contract That Was Created

question 45

Multiple Choice

The ________ is a derivative forward contract that was created in the 1990s. It has the same characteristics and documentation requirements as traditional forward contracts except that they are only settled in U.S. dollars and the foreign currency involved in the transaction is not delivered.

• A) nondeliverable forward
• B) dollar only forward
• C) virtual forward
• D) internet forward

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Definitions:

Expected Utility

A theory in economics that calculates the anticipated utility resulting from different outcomes in risky or uncertain situations.

Utility

(Of a consumer) a measure of the satisfaction derived from consumption of goods and services.

Probability

The measurement of the likelihood of a specific event or outcome occurring.

Insurance Premium

The amount of money that an individual or business must pay for an insurance policy.