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Q: Which best explains what a forward contract does?
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What statement best explains what a futures contract is?

A futures contract is a contract setting the price and date for a commodity purchase.


Which if the following best explains what a futures contract is?

(apex) a contract setting the price and date for a commodity purchase.


When you choose future contract over forward contract?

When there isn't an active market for the forward contract. Generally, Futures contracts have a much more active open market than forward contracts and have alot more choice in terms of expiration months than forward contracts.


What are the similarities between a forward contract and afutures contract?

Forwards Contract: A forward contract is the simplest of the Derivative products. It is a mutual agreement between two parties, in which the buyer agrees to buy a quantity of an asset at a specific price from the seller at a future date. The Price of the contract does not change before delivery. These type of contracts are binding, which means both the buyer and seller must stay committed to the contract. This means they are bound to deliver or take delivery of the product on which the forward contract was agreed upon. Forwards contracts are very useful in hedging Futures Contract: A futures contract is an agreement to buy or sell an asset at a certain time in the future at a specific price. The Contractual terms of the futures contracts are very clear. The Futures market was designed to solve the shortcomings in the forwards contracts. Unlike forwards, futures are traded in organized exchanges. They also use a clearing house that provides the necessary protection to both the buyer and the seller. The price of the futures contract can change prior to delivery. Hence, both participants must settle daily price changes as per the contract values. Difference: Futures are traded in Organized Exchanges while Forwards are Over-The-Counter (OTC) traded


Explain the difference between forward contracts and futures contracts?

Forwards Contract: A forward contract is the simplest of the Derivative products. It is a mutual agreement between two parties, in which the buyer agrees to buy a quantity of an asset at a specific price from the seller at a future date. The Price of the contract does not change before delivery. These type of contracts are binding, which means both the buyer and seller must stay committed to the contract. This means they are bound to deliver or take delivery of the product on which the forward contract was agreed upon. Forwards contracts are very useful in hedging Futures Contract: A futures contract is an agreement to buy or sell an asset at a certain time in the future at a specific price. The Contractual terms of the futures contracts are very clear. The Futures market was designed to solve the shortcomings in the forwards contracts. Unlike forwards, futures are traded in organized exchanges. They also use a clearing house that provides the necessary protection to both the buyer and the seller. The price of the futures contract can change prior to delivery. Hence, both participants must settle daily price changes as per the contract values. Difference: Futures are traded in Organized Exchanges while Forwards are Over-The-Counter (OTC) traded

Related questions

What best explains what a forward contract is?

A contract to deliver a particular commodity to a buyer sometime in the future.


What best explains the term social contract?

d


What best explains what a future's contract is?

A futures contract is a contract setting the price and date for a commodity purchase.


What statement best explains what a futures contract is?

A futures contract is a contract setting the price and date for a commodity purchase.


What Best Explains What Futures Contract Is?

(apex) a contract setting the price and date for a commodity purchase.


Which if the following best explains what a futures contract is?

(apex) a contract setting the price and date for a commodity purchase.


Which best explains the social contract?

The relationship between people and their government


Ask us of the following best explains what a forward contract is?

A forward contract is the simplest of the Derivative products. It is a mutual agreement between two parties, in which the buyer agrees to buy a quantity of an asset at a specific price from the seller at a future date. The Price of the contract does not change before delivery. These type of contracts are binding, which means both the buyer and seller must stay committed to the contract. This means they are bound to deliver or take delivery of the product on which the forward contract was agreed upon. Forwards contracts are very useful in hedging


Which best explains why writers use rhythm in poetry?

To create a sense of forward motion


What part of a contract explains the background of the contract?

Normally, the Recitals.


What event best explains why congress passed the contract labor law in 1864?

the civil war was being fought


Which of the following best explains how revenue is determined?

A contract to deliver a particular commodity to a buyer sometime in the future. Apexx J.Pichardo