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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

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

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

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Answer

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EllisElite · Tutor for 8 years

Answer

A<br /><br />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.

Explain

## Step1: <br />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.<br /><br />## Step2: <br />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.
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