Despite the fact that forward contracts carry more credit risk than futures contracts,forward contracts offer what primary advantage over futures contracts?
A)the over-the-counter forward market is a highly regulated market
B)forward contracts prevent the writer from assuming the credit risk of the buyer
C)terms and conditions are tailored to the specific needs of the two parties involved
D)transaction information between the two parties involved in the forward contract is readily available to the public
E)conditions of the forward contract,such as delivery date and location,cannot be altered

Question

Quizplus · Accepted Answer

The primary advantage of forward contracts over futures contracts is that the terms and conditions of the contract can be tailored to meet the specific needs of the two parties involved. This allows for greater flexibility in the contract, as opposed to the standardized terms and conditions of futures contracts.

Despite the Fact That Forward Contracts Carry More Credit Risk