What Is the Purpose of a Credit Forward Agreement

Multiple Choice

What is the purpose of a credit forward agreement?

A) To allow property-casualty insurers to hedge the extreme losses that occur after major catastrophes.
B) To adjust prices on outstanding futures each day to reflect current futures market conditions.
C) To facilitate the future exchange of an asset for cash at a price that is determined daily.
D) To hedge a cash asset on a direct dollar-for-dollar basis with a forward or futures contract.
E) To hedge against an increase in the default risk of a loan.