The Difference Between a Futures Contract and a Forward Contract

question 110

Multiple Choice

The difference between a futures contract and a forward contract is the:

• A) Payoff profile of the buyer.
• B) Payoff profile of the seller.
• C) Settlement process.
• D) Use of the spot rate versus the contract rate at settlement.
• E) Ability to write a futures contract, but not a forward contract, on an exchange rate.

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Definitions:

Argumentum Ad Hominem

A fallacy in debate that targets a person's character or personal traits in an attempt to discredit their argument, rather than addressing the argument itself.

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The various factors, such as supply and demand, that influence the price and availability of goods and services in a market.

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Describes unethical or illegal actions taken by companies or their representatives.

Corporate Management

Corporate management involves the processes, strategies, and decisions employed in directing and controlling the operations of a corporation to achieve its objectives and maximize shareholder value.