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Derivatives
Derivatives
Easy
Which of the following best describes a key difference between options and forward contracts?
A
An option gives the holder the right but not the obligation to transact, while a forward obligates both parties
B
A forward gives the holder the right but not the obligation to transact, while an option obligates both parties
C
Both options and forwards obligate both parties to transact at expiration
D
Neither options nor forwards require any payment at inception
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Tags
#options
#forward-contracts
#derivatives-comparison
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CFA Level I — Derivatives Practice Question | AcadiFi | AcadiFi