Question

Match the derivative type on the left with the correct description on the right

drag and drop options on the right-hand side and submit. for keyboard navigation..

- call option
- put option
- forward contract
- future contract

A. the right but not the obligation to sell an asset for a specific price sometime in the future
B. a contract that represents an ownership stake in a corporation put option press space or enter to grab
C. a private commitment between two parties to buy and sell an asset for a specific price sometime in the future forward contract press space or enter to grab
D. a contract that promises to pay a certain amount of money for a certain period of time futures contract

Answer 1

The matching can be done as;

A. the right but not the obligation to sell an asset for a specific price sometime in the future.(Call option)

A. the right but not the obligation to sell an asset for a specific price sometime in the future.(Put option)

C. a private commitment between two parties to buy and sell an asset for a specific price sometime in the future.(Forward contract)

D. a contract that promises to pay a certain amount of money for a certain period of time.(Futures contract)

What is a forward contract call and put option and future contract?

The price of the forward contract, put option, or call option will fluctuate in tandem with an increase in the value of the underlying asset. The type of contract determines the direction.

Commodities are typically traded using forward contracts, and equities are traded using puts and calls.A futures contract is an agreement between two parties to buy and sell a certain item at a defined price and in a specified quantity at a future date.