Answer (C) is correct . A forward contract is an executory contract in which the parties involved agree to the terms of a purchase and a sale, but performance is deferred. Accordingly, a forward contract involves a commitment today to purchase a product on a specific future date at a price determined today.
Answer (A) is incorrect because The price of a future contract is determined on the day of commitment, not some time in the future.
Answer (B) is incorrect because Performance is deferred in a future contract, and the price of the product is not necessarily its present price. The price can be any price determined on the day of commitment.
Answer (D) is incorrect because A forward contract is a firm commitment to purchase a product. It is not based on a contingency. Also, a forward contract does not involve an exercise price (exercise price is in an option contract).
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