Standardized agreements between two parties to trade financial assets on a future date in which the terms, including the price, are set today are called which of the following?
A)financial forward contracts
B)swaps
C)option contracts
D)financial futures contracts

Question

Quizplus · Accepted Answer

Standardized agreements between two parties to trade financial assets on a future date in which the terms, including the price, are set today are called financial futures contracts. This is because futures contracts are agreements to buy or sell an asset on a specific future date at a specific price that is determined today. Financial forward contracts are similar, but the terms of the contract are not standardized and are unique to each agreement. Swaps involve exchanging cash flows between two parties, while option contracts give the buyer the right (but not the obligation) to buy or sell an asset at a specific price on a specific date.

Standardized Agreements Between Two Parties to Trade Financial Assets on a Future