These derivative tools are traded in the over-the-counter market, and contract characteristics can be tailored to meet specific customer needs.Farmers and grain elevator operators also use them to lock in a price for their corn or soybeans or wheat.Identify them.
A)Forwards
B)Futures
C)Swaps
D)Options
E)Coupons

Question

Quizplus · Accepted Answer

Forwards are over-the-counter derivative contracts that can be customized to meet specific needs, unlike futures which are standardized and traded on exchanges. Farmers and grain operators use forwards to lock in prices for commodities like corn, soybeans, or wheat.

These Derivative Tools Are Traded in the Over-The-Counter Market, and Contract