Answer: True forward contracts are generally settled over cash
Step-by-step explanation:
Forward contracts are contracts between two parties – the buyers and sellers. Under the contract, a specified asset is agreed to be traded at a later date at a specified price
A forward contract delivery can occur on mainly two basis and those are either cash or delivery basis
They do not trade on a centralized exchange and are therefore considered over-the-counter instruments
Generally, the option of cash prevails over the option of delivery basis hence making this statement true that forward contracts are generally settled over cash.