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.

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Definitions:

Employers Liable

Pertains to the legal responsibility of employers for the actions of their employees and for providing a safe working environment.

National Labor Relations Act

A foundational statute in United States labor law that guarantees workers the right to form unions, engage in collective bargaining, and take collective action such as strikes.

Bargaining Power

The relative capacity of parties in a negotiation to exert influence over each other. If one party is significantly stronger than the other, they are said to have greater bargaining power.

Organized

The state of being systematically arranged or structured, often referring to entities like groups or data that are orderly and coordinated.