Futures contracts differ from forward contracts in that ________.
A) futures contracts are standardized and performance of each party is guaranteed by the clearinghouse
B) futures contracts are standardized and require a daily settling of any gains or losses
C) futures contracts are standardized, performance of each party is guaranteed by a clearing house, and they require a daily settling of any gains or losses
D) performance is guaranteed by a process known as marking to market

Question

Quizplus · Accepted Answer

Futures contracts are standardized and performance of each party is guaranteed by a clearinghouse. Additionally, they require a daily settling of any gains or losses. Marking to market is a process used to determine the daily gains or losses on a futures position, but it is not the only difference between futures and forward contracts.

Futures Contracts Differ from Forward Contracts in That ________