Asked by Hadeel Damra on Jul 17, 2024
Verified
The seller of a forward contract has an obligation to _____ and _____.
A) Make delivery; accept payment for the goods.
B) Take delivery; accept payment for the goods.
C) Take delivery; pay for the goods.
D) Make delivery; pay for the goods.
E) Make delivery; accept the spot price on that date.
Forward Contract
An individualized pact made between two entities to trade an asset on an agreed future date at a price set in the present.
Make Delivery
The process of fulfilling an order by providing the promised product or service to the buyer.
Accept Payment
The act of receiving money or other forms of payment in exchange for goods or services provided.
- Identify the differences between several financial instruments like forwards, futures, options, and swaps.
Verified Answer
GA
glorious abbeyJul 23, 2024
Final Answer :
A
Explanation :
The seller of a forward contract has the obligation to make delivery of the underlying asset at the agreed-upon price and accept payment for the goods from the buyer at the contract's expiration.
Learning Objectives
- Identify the differences between several financial instruments like forwards, futures, options, and swaps.