Forward Contracts Are Contracts to Buy or Sell a Specified

question 8

Multiple Choice

Forward contracts are contracts to buy or sell a specified amount of an asset at a specified, fixed price with delivery at a specified future point in time.Which of the following is true about these contracts?

• A)​The party that agrees to buy the asset is said to be in a short position.
• B)​The party that agrees to sell the asset is said to be in a long position.
• C)​The specified, fixed price in the contract is known as the forward rate.
• D)​A forward contract requires an initial deposit of funds with the transacting broker.

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