The Buyer of a Forward Contract

question 33

Multiple Choice

The buyer of a forward contract:

• A) will be taking delivery of the good(s) today at today's price.
• B) will be making delivery of the good(s) at a later date at that date's price.
• C) will be making delivery of the good(s) today at today's price.
• D) will be taking delivery of the good(s) at a later date at pre-specified price.
• E) Both will be taking delivery of the good(s) today at today's price or will be taking delivery of the good(s) at a later date at pre-specified pricE.

---

Definitions:

Penetration Pricing

A market strategy where a product is introduced with a low price to attract customers and gain market share before eventually increasing the price.

Demand-oriented

Pricing strategy or manufacturing approach that is guided by the level of demand from consumers or market conditions.

Price Lining

Setting the price of a line of products at a number of different specific pricing points.

Target Pricing

Consists of (1) estimating the price that ultimate consumers would be willing to pay for a product, (2) working backward through markups taken by retailers and wholesalers to determine what price to charge wholesalers, and then (3) deliberately adjusting the composition and features of the product to achieve the target price to consumers.