Question

An agreement to buy/sell a financial instrument at a fixed future date, that is sold over an exchange, is a/an ________

A Spot Contract Correct Answer Incorrect Answer
B Forward Contract Correct Answer Incorrect Answer
C Futures Contract Correct Answer Incorrect Answer
D Option Contract Correct Answer Incorrect Answer
E All of the above Correct Answer Incorrect Answer

Solution

A futures contract is more standardized, formalized and a legally binding agreement to buy/sell a commodity or a financial instrument at a pre-specified future date and at a price agreed upon today. These contracts are typically traded at an exchange.

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