Forward contracts rarely require a performance guarantee or collateral.

Name: Forward contracts rarely require a performance guarantee or collateral.
Brand: Quizplus
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Quizplus · Accepted Answer

Forward contracts often require a performance guarantee or collateral to ensure that one party will fulfill their contractual obligations. This is especially important in situations where the price of the underlying asset could fluctuate significantly, leaving one party with a large financial loss if the other party fails to perform.

Forward Contracts Rarely Require a Performance Guarantee or Collateral