Which of the following is false regarding futures and forward contracts?
A) Futures are only traded on an exchange.
B) Both forward and futures contracts are marked-to-market.
C) Forward contracts are more flexible than futures contracts.
D) Futures contracts have margin requirements while forward contracts do not.
E) Forward contracts and futures contracts both specify the price for future delivery.

Question

Quizplus · Accepted Answer

Marking to market is a feature of futures contracts, where the gains and losses are settled on a daily basis. Forward contracts, on the other hand, do not have this feature; the gains or losses are realized at the end of the contract term.

Which of the Following Is False Regarding Futures and Forward