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
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Please provide the answer to this financial accounting question using the right approach.

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
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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