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Basic Question 18 of 18
Which of the following statements about forward and future contracts is FALSE?
B. A predetermined price to be paid for a good is a necessary requirement in the terms of a forward contract.
C. The future value of a financial derivative depends on the value of its underlying asset.
D. The primary difference between forwards and futures is that only futures are considered financial derivatives.
A. A future requires the contract purchaser to receive delivery of the good at a specified time.
B. A predetermined price to be paid for a good is a necessary requirement in the terms of a forward contract.
C. The future value of a financial derivative depends on the value of its underlying asset.
D. The primary difference between forwards and futures is that only futures are considered financial derivatives.
User Contributed Comments 4
| User | Comment |
|---|---|
| viruss | Well A is also false because there are cash-settled future contracts that doesn't involved physical delivery ... |
| terryn | A is true - A futures contract requires delivery does not mean it cannot be settled with cash. |
| farhan92 | not your customary east last question... |
| ascruggs92 | A is true - delivery doesn't have to be physical, banks can wire money into your bank account. |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
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Learning Outcome Statements
describe classifications of assets and markets
describe the major types of securities, currencies, contracts, commodities, and real assets that trade in organized markets, including their distinguishing characteristics and major subtypes
CFA® 2024 Level I Curriculum, Volume 3, Module 1.