Futures differ from forward contracts because
A) Futures have more liquidity risk.
B) Futures have more credit risk.
C) Futures have more maturity risk.
D) None of the above
E) All of the above

Question

Quizplus · Accepted Answer

Futures differ from forward contracts because they are standardized contracts traded on exchanges with daily settlement and margin requirements. Therefore, futures have less liquidity risk, less credit risk, and less maturity risk than forward contracts.

Futures Differ from Forward Contracts Because