Which of the Following Is Correct When Contracting Ahead in the Forward

question 70

Multiple Choice

Which of the following is correct when contracting ahead in the forward exchange market?

• A) At contract close you pay either the forward rate that was contracted or the then-current rate.
• B) Contracting ahead is always cheaper than waiting to pay spot rates.
• C) Your cost is locked in from the beginning of the contract, regardless of market changes.
• D) Paying spot price is safer than contracting forward.

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