A forward contract's fair value at inception is typically: [A] Equal to the notional amount [B] Zero [C] Equal to the premium paid [D] The present value of future cash flows [E] none
A forward contract's fair value at inception is typically: [A] Equal to the notional amount [B] Zero [C] Equal to the premium paid [D] The present value of future cash flows [E] none
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications
Section: Chapter Questions
Problem 4Q
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Question
![A forward contract's fair value at inception is
typically:
[A] Equal to the notional amount
[B] Zero
[C] Equal to the premium paid
[D] The present value of future cash flows
[E] none](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F85647878-b4b2-4d4c-8fe2-8bbd62eb3bba%2F93167a3b-baae-4cd0-9149-ac2d05be1103%2F29gigm_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A forward contract's fair value at inception is
typically:
[A] Equal to the notional amount
[B] Zero
[C] Equal to the premium paid
[D] The present value of future cash flows
[E] none
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