Match the items of List-I with List-Il. List-I List-II a. Future 1. Consists of purchase or sale of commodities in two different markets with the expectations that a future change in price in one market will be offset by an opposite change in the other market b. Swap 2. A contract in which a seller agrees to deliver an asset to a buyer at a predetermined price at some future date as privately negotiated c. Hedging 3. A contractual agreement for exchanging a steam of payments with opposite and matching needs, to reap the benefit arising due to market discrepancies d. Forward 4. A contract covering the purchase and sale of physical commodities or financial instruments for future delivery on a future exchange floor

a-4, b-3, c-2, d-1
a-1, b-2, c-3, d-4
a-2, b-1, c-3, d-4
a-4, b-3, c-1, d-2

The correct answer is: A. a-4, b-3, c-2, d-1

Here

is a brief explanation of each option:

  • Future is a contract covering the purchase and sale of physical commodities or financial instruments for future delivery on a future exchange floor.
  • Swap is a contractual agreement for exchanging a steam of payments with opposite and matching needs, to reap the benefit arising due to market discrepancies.
  • Hedging is a technique used to reduce the risk of loss from adverse price movements in an asset.
  • Forward is a contract in which a seller agrees to deliver an asset to a buyer at a predetermined price at some future date as privately negotiated.

In the given question, option A is the only option that matches the definitions of the terms correctly.