Hedging with forwards and futures contracts is different due to the nature of the two contracts.Which of the following statements is incorrect in terms of a comparison of the two derivatives?
A) Forward contracts are better at reducing legal risk.
B) Futures contracts are better at reducing transaction costs.
C) Futures contracts are better at reducing credit risk.
D) Futures contracts are more standardized.
E) Futures contracts are better at reducing liquidity risk.
Correct Answer:
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