What is the difference between a forward commitment and a contingent claim？

A forward commitment is an agreement to buy or sell an asset at a future date at a predetermined price. It is a binding contract that obligates the parties involved to execute the transaction at the agreed-upon terms.

On the other hand, a contingent claim is a financial instrument whose value is dependent on the occurrence of a specific event. The value of a contingent claim is uncertain until the event occurs, and it may result in a gain or a loss for the holder of the claim.

In summary, the main difference between a forward commitment and a contingent claim is that a forward commitment involves a binding agreement to buy or sell an asset, while a contingent claim is a financial instrument whose value is dependent on the occurrence of a specific event.