Both parties to that agreement are under a contractual:
AObligation
BObservation
COccupation
DOptimisation
Answer & Solution
Correct answer: A. Obligation
1. Neither side may simply walk away.
2. The terms bind them both.
3. They are under a contractual obligation.
_Source: OpenStax Principles of Finance 2e, Chapter 20, Risk Management and the Financial Manager._
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