QUESTIONS 91 THROUGH 96 RELATE TO DERIVATIVE INVESTMENTS.

94. Two parties agree to a forward contract to deliver the S&P 500 Index at a price of

$375,000 in 2 months time. When the forward contract expires, the price of the

S&P 500 Index is $350,000 but the long party is unable to pay the cash

settlement. The short party is most likely obligated to:

A. Default on the forward contract

B. Do nothing until the long makes payment

C. Accept delivery of S&P 500 stocks from the long