On the settlement date of a forward contract: A. the short may be required to sell the asset B. the long must sell the asset or make a cash payment C. at least one party must make a cash payment to the other D. the long has the option to accept a payment or purchase the asset My rationale: C. If it is a cash settlement, money must flow between 2 parties to settle. If it is a delivery settlement, the long pays $$$ when the short delivers the asset/security. 1. What’s wrong with my rationale? 2. Your answer and reasoning please?
I thik A is the most accurate there can be physical delivery or cash settlement