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 an underlying asset at a future date and a predetermined price. They are usually used to hedge against future price fluctuations of commodities or financial instruments, such as currencies, stocks, or bonds. They are not standardized and cannot be resold easily.

Forward Contracts Are