A forward contract to deliver British pounds for U.S. dollars could be described either as ________ or ________.
A) buying dollars forward; buying pounds forward
B) selling pounds forward; selling dollars forward
C) selling pounds forward; buying dollars forward
D) selling dollars forward; buying pounds forward

Question

Quizplus · Accepted Answer

Selling pounds forward means agreeing to sell pounds in the future at a set price. Buying dollars forward means agreeing to buy dollars in the future at a set price. Therefore, selling pounds forward and buying dollars forward would describe a forward contract to deliver British pounds for U.S. dollars.

A Forward Contract to Deliver British Pounds for U