Advantages of forward contracts include: (1) that they can be tailor-made for any amount, security, and time period; (2) that they are more liquid than futures contracts and are backed by a clearing house.

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Quizplus · Accepted Answer

This statement is false. Futures contracts are generally more liquid than forward contracts and are also backed by a clearing house, providing for greater security. Forward contracts, on the other hand, are typically less standardized and less flexible in terms of their terms and conditions.

Advantages of Forward Contracts Include: (1) That They Can Be