The major difference between valuing futures versus forward contracts stems from the fact that future contracts are
A) traded on exchange.
B) backed by a clearinghouse.
C) marked-to-market daily.
D) less risky.
E) relatively inflexible.

Question

Quizplus · Accepted Answer

The major difference between valuing futures and forward contracts is that futures contracts are marked-to-market daily. This means the gains and losses from futures contracts are settled at the end of each trading day, unlike forward contracts, which are settled at the end of the contract term.

The Major Difference Between Valuing Futures Versus Forward Contracts Stems