The precise terms of each futures contract are
A) negotiated by the long and the short.
B) set by the short position.
C) set by the long position.
D) established by the exchange on which the trade takes place.

Question

Quizplus · Accepted Answer

The terms of each futures contract are established by the exchange on which the trade takes place. The exchange sets the specifications for each contract, such as the underlying asset, delivery date, contract size, and tick size, which must be followed by all parties trading on that exchange. The exchange also acts as a counterparty to both the buyer and seller, guaranteeing the performance of the contract.

The Precise Terms of Each Futures Contract Are