Which of the following statements regarding early termination of a forward contract is most accurate
A: A party who enters into an offsetting contract to terminate has no risk.
B: A party who terminates a forward contract early must make a cash payment.
C: Early termination through an offsetting transaction with the original counterparty eliminates default risk.
A: A party who enters into an offsetting contract to terminate has no risk.
B: A party who terminates a forward contract early must make a cash payment.
C: Early termination through an offsetting transaction with the original counterparty eliminates default risk.
举一反三
- Which of the following statements regarding early termination of a forward contract is TRUE() A: There is no way to terminate a forward contract early. B: A party who enters into an offsetting contract to terminate has no risk. C: Early termination through an offsetting transaction with the original counterparty eliminates default risk.
- Which of the following item is CORRECT about termination? A: Convenience termination provisions address the defaults of G B: Default termination provisions refer to the owner’s termination without disclosing reasons. C: The owner can involve the third party to complete the work if the original contract is terminated. D: Provisions dealing with payment result from termination is not critical because GC and the owner can always bargain.
- Which of the following statements is most accurate() A: Forward contracts require that both parties to the transaction have a high degree of creditworthiness. B: Forward contracts are marked to market daily. C: Futures contracts have more default risk than forward contracts.
- A forward contract that must be settled by a sale of an asset by one party to the other party is termed a : A: physicals-only contract. B: deliverable forward contract. C: take-and-pay contract.
- The price of a forward contract most likely: A: decreases as the price of the underlying goes up. B: is constant and set as part of the contract specifications. C: increases as market risk increases.