6. Forward and futures contracts Aa Aa The derivatives markets contain different types of contracts. Forward contracts, futures contracts, options, and swaps are some common types of derivatives contracts. are customized agreements in which one party agrees to buy a commodity ata specific price on a specific future date, and the other party agrees to make the sale. TYypically, goods are actually delivered under these contracts. which of the following are used to hedge against price changes for input materials? O Finandial futures O Commodity futures Kulatsu Motors Co., an American company, has purchased 4 million worth of equipment from a French company Payment for the equipment is not due for six months. Kulatsu Motors Co. does not want to give up the free-trade credit, but it also wants to make sure that the dollar cost of 4 million does not rise over the next six months. which of the following actions would allow Kulatsu Motors Co. to lack in the dollar cost of the equipment? O Take a short position in foreign exchange futures O Take a long position in interest rate futures Take a long position in foreign exchange futures Take a short position in interest rate futures O Forward and futures currency contracts reflect an obligation to either buy or sell currency at a future date, whereas options are contracts traded between buyers and sellers that give the option holder the right, but not the obligation, to buy or sell a specific (underlying) asset at a specific price, called the exercise or strike price, on or before an expiration date. An American aption allows you to exerdise the option anytime on or before the expiration date