Which of the Following Is the Major Difference Between Forward

question 6

Multiple Choice

Which of the following is the major difference between forward and futures contracts?

• A) Futures contracts are more expensive than forward contracts.
• B) Forward contracts are available only for foreign currencies.
• C) Futures contracts are always delivered.
• D) Forward contracts are not marked to market.

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Definitions:

Outcome

The result or effect of an action, decision, or situation, often evaluated in terms of success, failure, or impact.

Without Collusion

Refers to actions or decisions made independently among competitors in a market, without secret cooperation or agreement to manipulate market conditions.

Collusion

An agreement among firms to coordinate actions like setting prices, with the aim of increasing profits by reducing competition.

High-Price Policy

A business strategy where goods or services are sold at higher prices to increase profit margins or reflect higher quality.