In April, a farmer goes to the local co-op and puts together a contract agreeing to sell 10,000 bushels of corn at $6.50 a bushel on November 1. This type of an agreement is best described as a: Forward contract Futures contract Swap

This is a forward contract, an agreement between two parties to sell an asset at a certain price at a certain time.Futures contracts are more standardized and bought and sold on an exchange.Swaps are a series of forward contracts. While the case could be made that a forward contract is just a single-series swap, the description best describes forward contracts.

Question Of The Week - Derivatives (6) - CFA Level 1

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This topic has 1 reply, 1 voice, and was last updated Mar-187:36 pm by AdaptPrep.

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- AdaptPrep
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  28 Feb 2018 at 7:45 am
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  In April, a farmer goes to the local co-op and puts together a contract agreeing to sell 10,000 bushels of corn at $6.50 a bushel on November 1. This type of an agreement is best described as a:
  - Forward contract
  - Futures contract
  - Swap
- AdaptPrep
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  - Undecided
  03 Mar 2018 at 7:36 pm
  Up
  3
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  ::
  This is a forward
  contract, an agreement between two parties to sell an asset at a certain
  price at a certain time.
  
  Futures contracts are more standardized and bought and sold
  on an exchange.
  
  Swaps are a series of forward contracts. While the case
  could be made that a forward contract is just a single-series swap, the
  description best describes forward
  contracts.
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