A forward contract gives its holder the option to conduct a transaction involving another security or commodity.

Name: A forward contract gives its holder the option to conduct a transaction involving another security or commodity.
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Question

Quizplus · Accepted Answer

A forward contract is an agreement between two parties to buy or sell a specified asset at a predetermined price and date in the future. It is not an option, but rather a binding obligation to conduct the transaction.

A Forward Contract Gives Its Holder the Option to Conduct