The essential feature of a ________ is that it immediately fixes the rate at which a specified amount of one currency is to be delivered in exchange for a specific amount of another at a future date.

Question

Quizplus · Accepted Answer

A forward contract is an agreement between two parties to buy or sell an asset (in this case, a specific amount of one currency for another) at a fixed price and date in the future. This fixed price is agreed upon at the time of the contract and is not affected by any changes in the market, ensuring certainty for both parties involved. Therefore, a forward contract immediately fixes the rate at which a specified amount of one currency is to be exchanged for another at a future date.

The Essential Feature of a ________ Is That It Immediately