One Difference Between a Futures Contract and a Forward Contract

question 40

Multiple Choice

One difference between a futures contract and a forward contract is that

• A)the price at which the currency will be delivered is specified in the forward contract, but a range of prices is stipulated in the futures contract.
• B)forward contracts are marked to market daily.
• C)futures contracts trade on exchanges while forward contracts trade in the over-the-counter market.
• D)the futures contract has more counterparty risk than the forward contract.

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Definitions:

Parol Evidence Rule

A legal principle in contract law that prevents parties from presenting extrinsic evidence of prior or contemporaneous agreements to alter or contradict the terms of a written contract.

Scalisi et al. v. New York University Medical Center

A legal case, specifics of which should be consulted through legal databases or sources for accurate details.

Parol Evidence

The rule in contract law that prohibits the introduction of evidence of prior or contemporaneous oral agreements to alter, contradict, or add to the terms of a written contract.

Typographical Error

A typographical error is a mistake made in the typing process of written or printed material, often referred to as a typo.