S3 4.2 Flashcards
1
Q
Is a FWD contract the same as a Futures contract?
A
Nope
2
Q
What is a FWD contract?
A
Sale of a commodity in the cash market for delivery on a later date
3
Q
Are FWD contracts Standardized like Futures contracts?
A
Nope - FWD are NON-Standardized
4
Q
Do FWD need be traded on an exchange?
A
No need
5
Q
Is a Clearing House involved in FWDs
A
No
6
Q
Is the value of a FWD kept current via mkt -2-mkt?
A
Nope
7
Q
Is there Delivery with FWDs?
A
Yes, delivery is expected - It’s a merchandising transaction
8
Q
Name the 2 types of FWD contracts
A
1) Cash - price determined on the delivery date
2) Fixed - price determined on contract entry date
