You Enter into a Forward Contract to Take Delivery of 1

question 86

Multiple Choice

You enter into a forward contract to take delivery of 1 million euros 3 months from now.What happens to the price you will pay at expiration if the euro depreciates during the contract period?

• A) Your price will increase.
• B) Your price will decrease.
• C) Your price was fixed at the onset of the contract.
• D) Your price was fixed but you will receive correspondingly more euros due to the depreciation.

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Definitions:

Actual Product

The tangible physical item or service that is being offered to consumers, including its features, design, brand name, and quality.

Shopping Product

A category of consumer goods that require considerable thought and effort in selection because they possess attributes such as quality, price, and style that are significant to the buyer.

Backpacking Trip

A form of low-cost, independent travel that involves carrying all necessary gear and belongings in a backpack for hiking, camping, or traveling.

Alternatives

Other options available to consumers in the marketplace that compete with a specific product or service.