Which of the following observations is true of forward contracts? a. substantial margin is required to initiate a contract. b. cannot be customized; for a specific amount at a specific date. c. must be completed either with the underlying's future delivery or net cash settlement. d. usually settled with a net cash amount prior to maturity date.

Many potential buyers value high-quality used cars at the full-information market price of € p1 and lemons at € p2. a limited number of potential sellers value high-quality cars at € v1 ≤ p1 and lemons at € v2 ≤ p2. everyone is risk neutral. the share of lemons among all the used cars that might be potentially sold is € θ . suppose that the buyers incur a transaction cost of $200 to purchase a car. this transaction cost is the value of their time to find a car. what is the equilibrium? is it possible that no cars are sold