单选题 When a party to a forward contract terminates the contract prior to the original expiration date by entering into a perfectly offsetting forward contract with a second eounterparty: A. the party terminating the forward contract has no default risk, but both counterparties lace default risk. B. the party terminating the contract is exposed to default risk, but has no further asset price risk. C. there is no future liability, but default risk remains for all parties until the original contract settlement date.

【正确答案】 B

【答案解析】When a forward contract is terminated by an offsetting contract with a second counterparty, there is no further asset price risk, but since there are two separate contracts with different counterparties, all parties are exposed to default risk until both contracts are settled. Since the two contracts may have different forward prices, the terminating party may have a future liability at settlement, but the amount is fixed at the time the offsetting contract is initiated. The terminating party may have locked in a future gain or loss, depending on the difference between the forward prices of the two offsetting contracts.