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When Troubled Financial Institutions Are Forced to Sell Assets Quickly

question 208

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When troubled financial institutions are forced to sell assets quickly at a deep discount, this is a(n) :


Definitions:

Options Contract

A financial agreement granting the buyer the opportunity, but not the obligation, to buy or sell an asset at a specific price on or before a certain date.

Forward Contract

A personalized agreement between two individuals to purchase or sell a property at a designated future time at a price determined currently.

Futures Contract

A standardized legal agreement to buy or sell a specific commodity or asset at a predetermined price at a specified time in the future.

Interest Rate Collar

A financial derivative strategy used to limit the range of possible interest rates movements by buying and selling interest rate options.

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