The primary difference between a forward contract and a futures contract is
A) The time of delivery
B) The time at which the price is determined
C) The use of an organized exchange for futures contracts
D) The type of commodity being exchanged
E) The form of payment for delivery

Question

Quizplus · Accepted Answer

The primary difference between a forward contract and a futures contract is the use of an organized exchange for futures contracts. Futures contracts are traded on organized exchanges, while forward contracts are private agreements between two parties. The time of delivery, time at which the price is determined, type of commodity being exchanged, and form of payment for delivery can be similar in both types of contracts.

The Primary Difference Between a Forward Contract and a Futures