What is a Forward Contract? Explain how does it work? Distinguish between Forward Contract and a Future Contract

A forward contract is a financial agreement between two parties to buy or sell an asset at a predetermined price at a future date. This type of contract is commonly used in the context of commodities, currencies, and financial instruments, including equity derivatives. The primary purpose of a forward contract is to manage or hedge risk by fixing the price of an asset in advance, providing both parties with a degree of certainty in an otherwise uncertain market environment.

How a Forward Contract Works:

1. Agreement: Two parties enter into a forward contract, specifying the asset to be traded, the quantity, the agreed-upon price (forward ___ __________ _______ _____ ________ __________ _____ ______.
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