Assume That the Price Paid by the Buyer of a Forward

question 46

Multiple Choice

Assume that the price paid by the buyer of a forward is $82 000 and further assume that the spot price of purchasing the hedged underlying asset at delivery date is $85 000. What is the result for the forward seller?

• A) A $3000 profit.
• B) A $3000 loss.
• C) The answer depends on how the forward price develops over time.
• D) Too little information to answer the question.

---

Definitions:

Public Law

The part of law that governs relationships between individuals and the government, and those relationships between individuals which are of direct concern to society.

Criminal Law

A body of laws that relates to crime and provides regulations for conduct deemed harmful, threatening, or otherwise endangering to the property, health, safety, and moral welfare of people.

Civil Law

A legal system focused on resolving disputes between individuals or entities and involves personal matters, excluding criminal proceedings.

Criminal Laws

Laws pertaining to crimes and their punishment, focusing on offenses against the state or society as a whole.