Currency futures contracts sold on an exchange:
A) contain a commitment to the owner, and are standardized.
B) contain a commitment to the owner, and can be tailored to the desire of the owner.
C) contain a right but not a commitment to the owner, and can be tailored to the desire of the owner.
D) contain a right but not a commitment to the owner, and are standardized.

Question

Quizplus · Accepted Answer

Currency futures contracts sold on an exchange contain a commitment to the owner, meaning that the buyer or seller is obligated to fulfill the terms of the contract at expiration. These contracts are also standardized, meaning that the contract terms (such as contract size, delivery date, and underlying currency) are predetermined and cannot be changed.

Currency Futures Contracts Sold on an Exchange