contingent claim问题

问题如下：

In contrast to contingent claims, forward contracts:

选项：

A.

have their prices chosen by the participants.

B.

could end in default by either party.

C.

can be exercised by physical or cash delivery.

解释：

B is correct. In a forward contract, either party could default, whereas in a contingent claim, default is possible only from the short to the long.

A is incorrect because the forward price is set in the pricing of the contract such that the starting contract value is zero, unlike contingent claims, under which parties can select any starting value.

C is incorrect because both forward contracts and contingent claims can be settled by either physical or cash delivery.