Forward Contracts

question 18

Multiple Choice

Forward contracts:

• A) contain a commitment to the owner, and are standardized.
• B) contain a commitment to the owner, and can be tailored to the desire of the owner.
• C) contain a right but not a commitment to the owner, and can be tailored to the desire of the owner.
• D) contain a right but not a commitment to the owner, and are standardized.

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Definitions:

Uncertainty

The state of being unsure about the future or about the outcome of specific processes or events.

Predominantly

Predominantly means mainly or for the most part, indicating that something is the dominant, principal, or most common element in a mixture or series.

Logical

Pertaining to the formal principles of reasoning and correct thinking.

Precise

Being exact, accurate, and clearly expressed or delineated.