Q842
The difference between a forward trade and a derivative may be attributed to which one of the following?
A.
The position of owning a good that one plans to sell in the future, the position of expecting to purchase the good in the future
B.
The parties agree to trade at a specified time in the future, at a price set now; derivative involves only payments of money, with no delivery of any commodity or assets
AnswerC.
The parties agree to trade at a future time, at a price to be decided in future; a derivative involves payments at a future specified time along with physical delivery of any commodity or asset
D.
The parties agree to trade and the amounts to be paid or received will not depend on the value at that time
Answer: Option B
Solution
Answer: Option B
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