QUESTION 6

Which of the following statements

correctly describes the forward contracts?

a.    They

are tailor-made instruments that are traded over the formal exchange.

b.    They

are standardised financial instruments that have a low credit risk and are easy

for the parties involved to get out of the contract once it has been

established.

c.     Because

of their nature, it can be concluded that they are liquid and have very low

credit risk.

d.    

Because

they are tailor-made, it is difficult to get out of once they have been

established.