- CFA Exams
- CFA Level I Exam
- Topic 7. Derivatives
- Learning Module 5. Pricing and Valuation of Forward Contracts and for an Underlying with Varying Maturities
- Subject 2. Pricing and Valuation of Forward Contracts
CFA Practice Question
Which of the following remains constant during the contract period for a forward contract?
B. Value
C. Both price and value
A. Price
B. Value
C. Both price and value
Correct Answer: A
The price remains constant for the forward contract and is set at the initiation of the contract. The value of the forward contract keeps on changing with the change in the underlying.
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