The primary difference between a futures contract and a forward contract is:

Question

Quizplus · Accepted Answer

The primary difference between a futures contract and a forward contract is that futures contracts are standardized, meaning that the terms and conditions of the contract are predetermined by the exchange on which it trades, whereas forward contracts are customized to meet the specific needs of buyers and sellers. This standardization makes futures contracts more liquid and easier to trade than forward contracts. The other options given are incorrect - futures contracts can be purchased from a variety of sources, forward contracts are available in the U.S., and while futures contracts are typically settled by delivery, they can also be settled with a cash payment.

The Primary Difference Between a Futures Contract and a Forward