22-46 A forward contract
A)has more credit risk than a futures contract.
B)is more standardized than a futures contract.
C)is marked to market more frequently than a futures contract.
D)has a shorter time to delivery than a futures contract.
E)is less risky than a futures contract.

Question

Quizplus · Accepted Answer

Forward contracts are private agreements between two parties, so they have more credit risk than futures contracts, which are traded on exchanges and have counterparty risk mitigated through margin requirements and a clearinghouse.

22-46 a Forward Contract