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Question
In which type of market does the transaction takes place on a credit basis?
In which type of market does the transaction takes place on a credit basis?
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Solution
The correct option is A Forward Market
In Forward Market, the purchase and sale of the commodities do not occur immediately. As the name suggests, in these markets, the transactions are settled on a future date. Thus, the transaction takes place on a credit basis. There is a promise to pay the consideration sometime in the future.
In Forward Market, the purchase and sale of the commodities do not occur immediately. As the name suggests, in these markets, the transactions are settled on a future date. Thus, the transaction takes place on a credit basis. There is a promise to pay the consideration sometime in the future.
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