The buyer of a forward contract:
A) Is obligated to make delivery and accept the forward price.
B) Has the option of taking delivery and paying the lesser of the spot market price or the contract price.
C) Has the option of making delivery and receiving the higher of the spot market price or the contract price.
D) Is obligated to take delivery and pays the lower of the spot market price or the contract price.
E) Is obligated to take delivery and pay the forward price.

Question

Quizplus · Accepted Answer

The buyer of a forward contract is obligated to take delivery of the underlying asset at the end of the contract term and pay the agreed-upon forward price, regardless of the spot market price at the time of delivery.

The Buyer of a Forward Contract