Answer: The correct answer is "A.The contract becomes more valuable as the price of the asset rises".
Explanation: The statement "A.The contract becomes more valuable as the price of the asset rises" is TRUE about long forward contract because this type of contract is an agreement to buy a certain product, that is, an asset, at a price that is predetermined in advance, therefore if the price of this asset increases, the contract becomes more attractive.
In the only case that the contract is worth 0 is when the current price is the same as the default.
A long forward contract is a contract that is enacted by the settlement of the dates that are to be longer than one year and far as the 10 years. Companies use this in certain situations of the currencies and the interest rate exposures.
The correct answer is "A.The contract becomes more valuable as the price of the asset rises".
The statement "A.The contract becomes more valuable as the price of the asset rises" is TRUE about the long forward contract because this type of contract is an agreement to buy a certain product, that is, an asset, at a price that is predetermined in advance, therefore if the price of this asset increases, the contract becomes more attractive.
The rest of the options are wrong because they do not specify the long-term or long-forward contract. They otherwise state it as a different concept with different aspects.
To know more about the long forward contract, refer to the link below:
https://brainly.com/question/17130427
