A one-year forward contract is an agreement where
A. One side has the right to buy an asset for a certain price in one year's time.
B. One side has the obligation to buy an asset for a certain price in one year's time.
C. One side has the obligation to buy an asset for a certain price at some time during the next year.
D. One side has the obligation to buy an asset for the market price in one year's time.
B
A one-year forward contract is an obligation to buy or sell in one year's time for a predetermined price. By contrast, an option is the right to buy or sell.
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