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Explain the Difference Between a Forward Contract and a Futures

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Essay

Explain the difference between a forward contract and a futures contract.


Definitions:

Units Manufactured

The total number of units produced by a company in a specific period, reflecting the company's production volume.

Year

refers to a period of twelve months used for financial, business, and calendar purposes.

Ending Inventory

Ending inventory refers to the total value or quantity of unsold goods that a company holds at the end of an accounting period.

Cash Disbursements

The outflow of cash for expenses or investments, typically detailed in a financial planning or accounting report.

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