Which of the Following Statements Is True of Forward Contracts

question 7

Multiple Choice

Which of the following statements is true of forward contracts?

• A) A forward contract has three parties: buyer, seller, exchange.
• B) There is no default risk in a forward contract.
• C) A forward contract is customizable and traded over-the-counter.
• D) A forward contract may be unilaterally revoked by the parties to the contract.

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Definitions:

Market Situation

The status and dynamics within a specific market at a certain time, influenced by factors such as supply and demand, competition, and regulatory environment.

Social Honor

The prestige, respect, or esteem that an individual or group receives from others within a society, often based on their actions, achievements, or social standing.

Stratification Theory

A sociological perspective that focuses on the structured social inequality or hierarchical layers of society, influenced by factors such as class, race, and gender.

Functionalism

A sociological perspective that emphasizes the interdependence of all parts of a society and how different elements function to maintain social order and stability.