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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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