Question
Which of the following statements is true? Select the correct answer from the options below A forward contract is one in which one party agrees to buy 'something, and another party agrees to sell that same'something at a designated future date A forward contract is one in which one party decides the price of a particular item immediately, and the price remains unchanged A forward contract is one in which one party agrees to buy a product in exchange for another physical product of equivalent value A forward contract is one in which payments are made in US dollars only
Answer
4.2
(242 Votes)
Ellis
Elite · Tutor for 8 years
Answer
AA forward contract is one in which one party agrees to buy 'something', and another party agrees to sell that same 'something' at a designated future date.
Explanation
## Step1: The given question requires us to identify the true statement about a forward contract from the options provided. A forward contract is a contract between two parties where the buyer agrees to purchase, and the seller agrees to sell an asset at a prearranged future point in time.## Step2: By examining the available options, our best understanding can be associated with option 'A', which correctly describes a forward contract as an agreement in which one party agrees to purchase, and the other party agrees to sell a certain asset on a specific future date.