Question
17. a. What are the differences between buying a forward contract with a forward price of $100 and buying a call option with a strike
17. a. What are the differences between buying a forward contract with a forward price of $100 and buying a call option with a strike price of $100 on the same underlying asset? Check all that apply:
The forward contract is always more profitable than the option.
The option can only be used in the future, while the forward can be used to buy the asset now.
The option gives the buyer a choice about buying the asset, while the forward contract does not.
The option position is riskier due to counterparty risk.
You need to pay upfront to buy an option, but not for a forward contract.
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