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      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.

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