A forward contract
A) is generally exchange traded, therefore has a ready market value.
B) creates a right but not an obligation.
C) commits the contracting parties upfront to do something in the future.
D) has no locked in time period.

Question

Quizplus · Accepted Answer

A forward contract commits the contracting parties to do something in the future, typically buying or selling an asset at a specified price and date. It is an over-the-counter (OTC) agreement and does not have a ready market value. It creates an obligation for both parties, unlike an option which creates a right but not an obligation. Forward contracts generally have a locked-in time period.

A Forward Contract