1. Which of the following best describes the difference between the price of a forward contract and...

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1. Which of the following best describes the difference between the price of a forward contract and its value?

A. The forward price is fixed at the start, and the value starts at zero and then changes.

B. The price determines the profit to the buyer, and the value determines the profit to the seller.

C. The forward contract value is a benchmark against which the price is compared for the purposes of determining whether a trade is advisable.

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Derivatives

ISBN: 9781119850571

1st Edition

Authors: CFA Institute

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