n NISM Certifications
X NISM Series X
Medium

What type of derivatives are 'Forwards'?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Perpetual

  2. B

    Exchange Traded

  3. Over The Counter (OTC)

    Correct answer

  4. D

    Standardised

Why this is the answer

Forward contracts are bilateral OTC agreements negotiated directly between parties, with customized terms and no standardization.

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