orward contracts are contracts to buy or sell a specified amount of an asset at a specified, fixed price with delivery at a specified future point in time. Which of the following is true about these contracts? a. The party that agrees to buy the asset is said to be in a short position. b. The party that agrees to sell the asset is said to be in a long position. c. The specified, fixed price in the contract is known as the forward rate. d. A forward contract requires an initial deposit of funds with the transacting broker.
orward contracts are contracts to buy or sell a specified amount of an asset at a specified, fixed price with delivery at a specified future point in time. Which of the following is true about these contracts? a. The party that agrees to buy the asset is said to be in a short position. b. The party that agrees to sell the asset is said to be in a long position. c. The specified, fixed price in the contract is known as the forward rate. d. A forward contract requires an initial deposit of funds with the transacting broker.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Forward contracts are contracts to buy or sell a specified amount of an asset at a specified, fixed price with delivery at a specified future point in time. Which of the following is true about these contracts?
a. |
The party that agrees to buy the asset is said to be in a short position. |
b. |
The party that agrees to sell the asset is said to be in a long position. |
c. |
The specified, fixed price in the contract is known as the forward rate. |
d. |
A forward contract requires an initial deposit of funds with the transacting broker. |
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