Which of the Following Is NOT a Difference Between a Currency

question 37

Multiple Choice

Which of the following is NOT a difference between a currency futures contract and a forward contract?

• A) The futures contract is marked to market daily, whereas the forward contract is only due to be settled at maturity.
• B) The counterparty to the futures participant is unknown with the clearinghouse stepping into each transaction, whereas the forward contract participants are in direct contact setting the forward specifications.
• C) A single sales commission covers both the purchase and sale of a futures contract, whereas there is no specific sales commission with a forward contract because banks earn a profit through the bid-ask spread.
• D) All of the above are true.

---

Definitions:

AVC

Average Variable Cost, the total variable cost divided by the quantity of output produced, representing the variable cost of producing each unit.

Shutdown Point

The level of operation at which a company does not generate enough revenue to cover its variable costs, leading to a decision to cease operations temporarily.

Short-Run Supply Curve

A graphical representation that shows the relationship between the price of a good or service and the quantity that producers are willing to supply in the short term, typically illustrating an upward slope.

Output

The total amount of goods and services produced by an economy, a sector, or a company during a specific period.