Concerning foreign exchange trading, a "forward contract"
A) has no defined expiration date at which settlement must occur.
B) has contract costs based on the brokerage fees for sell and buy orders.
C) is issued by a major commercial bank, like Citibank or Barclays.
D) is traded on IMM's market floor.

Question

Quizplus · Accepted Answer

Forward contracts are not traded on exchanges but are private agreements between two parties, often facilitated by a major commercial bank. These contracts allow parties to lock in an exchange rate for a transaction that will occur at a future date. Unlike futures contracts, which are standardized and traded on exchanges, forward contracts are customizable and typically involve a bank or financial institution as the intermediary.

Concerning Foreign Exchange Trading, a "Forward Contract