Asked by
Vikas Kashver
on Nov 06, 2024
Verified
For forward contracts, the payoff profile for the seller of a forward contract is a downward sloping linear function.
Payoff Profile
A plot showing the gains and losses that will occur on a contract as the result of unexpected price changes.
Forward Contract
A customized contract between two parties to buy or sell an asset at a specified price on a future date.
- Familiarize yourself with the elementary distinctions between forward contracts and futures contracts.
Verified Answer
PT
Learning Objectives
- Familiarize yourself with the elementary distinctions between forward contracts and futures contracts.
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