Which one of the following statements concerning forward contracts is true?
A) Forward contracts are marked-to-the market daily.
B) Forward contracts can NOT be resold once purchased.
C) Both the buyer and the seller of a forward contract can profit if both parties hold the original contract for the duration of the contract.
D) The buyer of a forward contract has the right, but not the obligation, to take delivery of the goods.
E) The seller of a forward contract on corn profits when the price of corn falls.

Question

Quizplus · Accepted Answer

Forward contracts are agreements to buy or sell an asset at a future date for a price agreed upon today. The seller of a forward contract profits if the price of the underlying asset falls, as they can sell at the higher agreed price.

Which One of the Following Statements Concerning Forward Contracts Is