A contract,traded on an exchange,that allows a company to buy a specified quantity of a commodity or a financial security at a specified price on a specified future date is referred to as a(n)
A) interest rate swap.
B) forward contract.
C) futures contract.
D) option.

Question

Quizplus · Accepted Answer

A futures contract is a contract traded on an exchange that involves the purchase of a specified quantity of a commodity or financial security at a specified price on a specified future date. This differs from a forward contract, which is a private agreement between two parties and not traded on an exchange. Interest rate swaps and options are financial instruments that serve different purposes.

A Contract,traded on an Exchange,that Allows a Company to Buy