Forward contracts are:
A) an agreement between more than two parties.
B) contracts usually involving the exchange of a commodity or financial instrument.
C) always standardized.
D) easily resold.

Question

Quizplus · Accepted Answer

Forward contracts are agreements between two parties to buy or sell a specific asset or commodity at a future date for a predetermined price. These contracts are not standardized and are typically used to manage price risk. Therefore, option A and C are incorrect. Forward contracts are not easily resold, so option D is also incorrect.

Forward Contracts Are