Which of the Following Is True for Forward Contracts

question 59

Multiple Choice

Which of the following is true for forward contracts?

• A)They have standardized terms.
• B)They have clearinghouses that guarantee the transactions.
• C)They are private contracts between two parties.
• D)The parties involved have a zero risk of defaulting on a contract.
• E)They are marked-to-market daily.

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Definitions:

Income Statement

A financial document that shows a company's revenues, expenses, and profit or loss over a specific period.

Classify

To arrange or organize items into categories based on shared characteristics or criteria.

Perpetual Inventory System

A method of inventory management where updates are made continuously as transactions occur, providing real-time inventory levels.

Selling Price

The price at which goods or services are offered for sale to customers.