Which of the following statements accurately describes a forward contract?
1
A standardized contract traded on an exchange to buy or sell an asset at a future date
2
An agreement between two parties to exchange a series of cash flows in the future based on a notional principal amount
3
A customized contract between two parties to buy or sell an asset at a specified future date at a price agreed upon today
4
A financial instrument that derives its value from the performance of an underlying asset
5
A legally binding contract that requires the delivery of a physical commodity