Which of the following statements is most CORRECT?
A) Futures contracts generally trade on an organized exchange and are marked to market daily.
B) Goods are never delivered under forward contracts, but are almost always delivered under futures contracts.
C) There are futures contracts for currencies but no forward contracts for currencies.
D) Futures contracts don't have any margin requirements but forward contracts do.
E) One advantage of forward contracts is that they are default free.

Question

Quizplus · Accepted Answer

Futures contracts are standardized and trade on an organized exchange, whereas forward contracts are customized and traded over-the-counter. Futures contracts also require a daily mark-to-market settlement to account for gains and losses, which is not the case for forward contracts.

Which of the Following Statements Is Most CORRECT