An agreement between a buyer and a seller at time 0 to exchange a pre-specified asset for cash at a specified later date is the characteristic of a
A)spot contract.
B)forward contract.
C)futures contract.
D)put options contract.
E)call options contract.

Question

Quizplus · Accepted Answer

A forward contract is an agreement between a buyer and seller to exchange an asset for cash at a pre-specified future date. This differs from a spot contract (A), which involves an immediate exchange of assets and cash, as well as futures (C) and options contracts (D and E), which are standardized and traded on exchanges.

An Agreement Between a Buyer and a Seller at Time