A tailor-made contract with a price that is established today for future delivery is called a ___________.
A)futures contract
B)forward contract
C)spot contract
D)call option

Question

Quizplus · Accepted Answer

A forward contract involves a tailor-made agreement between two parties to buy or sell an asset at a specified price on a future date. The price is established today, making it different from a spot contract where the price is determined at the time of the transaction. This differs from a futures contract which involves trading standardized contracts on a public exchange. A call option is a contract that gives the owner the right, but not the obligation, to buy an underlying asset at a specified price within a certain time period.

A Tailor-Made Contract with a Price That Is Established Today