CoboCards App FAQ & Wishes Feedback
Language: English Language
Sign up for free  Login

This flashcard is just one of a free flashcard set. See all flashcards!

All main topics / Finance & Investment / Derivatives / Derivatives
1
1.A one-year forward contract is an agreement where
A.One side has the right to buy an asset for a certain price in one year’s time.
B.One side has the obligation to buy an asset for a certain price in one year’s time.
C.One side has the obligation to buy an asset for a certain price at some time during the next year.
D.One side has the obligation to buy an asset for the market price in one year’s time.
Answer: B
A one-year forward contract is an obligation to buy or sell in one year’s time for a predetermined price. By contrast, an option is the right to buy or sell.
New comment
lilycollins9x@gmail.com (04.01.2025)
When you enter into a forward contract, you’re committing to a price no matter what happens to the market, and that's where the risk lies. The key here is option http://sprunkiincredibox.org/ You're obligated to buy or sell the asset at that predetermined price in the future, so it could end up being a bad deal if the price moves against you. This is where proper analysis and strategy come in—if you’re wrong about market direction, you might face significant losses. It’s important to be cautious when agreeing to these contracts.
CurtisBrown (28.11.2024)
A one-year forward contract obligates one party to buy an asset at a predetermined price in a year, contrasting with an option, which provides the right but not the obligation. It's like navigating through http://geometrydashjump.com/ where each level represents a different financial instrument, and understanding these contracts helps you avoid pitfalls and reach your goals.
RoseBL (21.10.2024)
Thank you for providing this clear explanation of a one-year forward contract, which highlights the obligation to buy or sell at a predetermined price. Your clarification is greatly appreciated!
http://football-bros.org
annastark (15.04.2024)
I was very encouraged to find this site. The reason being that this is such an informative post. Thanks for sharing https://infinite-craft.co
Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015

Cancel
Email

Password

Login    

Forgot password?
Deutsch  English