The purpose of a forward agreement is
A)to reduce the uncertainty of future exchange rates.
B)to reduce the possibility of being worse off.
C)give up an opportunity of one party to gain over another.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Forward agreements are financial contracts used to lock in prices or rates, thereby reducing uncertainty about future costs or revenues, minimizing the risk of financial loss, and eliminating the chance for one party to benefit at the expense of another.

The Purpose of a Forward Agreement Is