The Main Difference Between a Forward Contract and a Cash

question 18

Multiple Choice

The main difference between a forward contract and a cash transaction is:

• A)a forward contract provides an option while a cash transaction is an obligation.
• B)a forward contract is fulfilled at a later date while the cash transaction is carried out immediately.
• C)the price of a forward contract is decided at a later date while a cash transaction occurs at the current spot rate.
• D)a cash transaction can be reversed but a forward contract cannot.
• E)the forward contract can be negotiated while a cash transaction cannot.

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Definitions:

Position

A specific location or arrangement in space that an object or entity occupies at any given time.

Location

The specific place or position where something exists or is situated.

Cutaneous Sensations

Sensory experiences originated in the skin, including touch, pressure, heat, cold, and pain.

Conscious Perception

The awareness or understanding of sensory information by the mind, allowing for interaction with and interpretation of the environment.