Which of the Following Observations Is True of Forward Contracts

question 53

Multiple Choice

Which of the following observations is true of forward contracts?

• A) Substantial margin is required to initiate a contract.
• B) Must be completed either with the underlying's future delivery or net cash settlement.
• C) Cannot be customized; for a specific amount at a specific date.
• D) Usually settled with a net cash amount prior to maturity date.

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Definitions:

Flexible Benefit Plans

Employee benefit programs that allow workers to choose from a variety of pre-tax benefits, tailoring the package to their personal needs.

Economic Value

The worth of a good or service determined by its capacity to provide utility to buyers or the income it generates for sellers.

Personal Finances

The management of an individual's or family's money, including budgeting, saving, investing, and spending.

Benefit Costs

Expenses incurred by organizations due to the provision of employee benefits, such as health insurance, retirement plans, and paid leave.