A risk that a bank has with futures contracts but not forward contracts is:

Question

Quizplus · Accepted Answer

Liquidity risk is more associated with futures contracts than with forward contracts because futures are traded on exchanges and require daily settlement of gains and losses, which can lead to liquidity demands. Forward contracts, on the other hand, are private agreements between two parties and are settled at the end of the contract term, thus not requiring daily liquidity adjustments.

A Risk That a Bank Has with Futures Contracts but Not