Forward contracts are similar to normal transactions between buyers and sellers with one exception.Which of the following statements best describes it?
A)The timing of payment is different.
B)The timing of ownership transfer is different.
C)The timing of price derivation is different.
D)Both A and B

Question

Quizplus · Accepted Answer

In a forward contract, the agreement is made today for a future transaction at a predetermined price, with the ownership transfer and payment being made at a future date. This differs from a normal transaction where ownership and payment are transferred immediately. Therefore, both the timing of payment and ownership transfer are different in a forward contract.

Forward Contracts Are Similar to Normal Transactions Between Buyers and Sellers