Question

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

A Spot Contract Correct Answer Incorrect Answer
B Forward Contract Correct Answer Incorrect Answer
C Option Contract Correct Answer Incorrect Answer
D Futures Contract Correct Answer Incorrect Answer
E None 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.

Practice Next
×
×