The basic differences)between forward and futures contracts is that
A)forward contracts are individually tailored while futures contracts are standardized
B)forward contracts are negotiated with banks whereas futures contracts are bought and sold on an organized exchange
C)forward contracts have no daily limits on price fluctuations whereas futures contracts have a daily limit on price fluctuations
D)all of the above

Question

Quizplus · Accepted Answer

All the options listed are correct differences between forward and futures contracts. Forward contracts are customizable and privately negotiated, typically not involving a standardized exchange, and do not have daily price fluctuation limits. In contrast, futures contracts are standardized, traded on organized exchanges, and often have daily price fluctuation limits.

The Basic Differences)between Forward and Futures Contracts Is That