The default risk of a futures contract is less than that of a forward contract.

Name: The default risk of a futures contract is less than that of a forward contract.
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The default risk of a futures contract is lower because the exchange clearinghouse acts as a middleman and guarantees the performance of both parties. In a forward contract, there is no such guarantee and the counterparties are exposed to each other's default risk.

The Default Risk of a Futures Contract Is Less Than