The Key Difference Between a Forward and a Futures Contract

question 89

Multiple Choice

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

• A) a forward contract is customized where a futures contract is not.
• B) a forward contract is bought and sold on organized exchanges.
• C) only the forward contracts have settlement dates.
• D) the amount of time involved.

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Definitions:

Expectancy Theory of Motivation

A psychological theory suggesting that an individual's motivation is influenced by their expectation of achieving desirable outcomes through their actions.

Instrumentality

A person’s belief that various outcomes will occur as a result of task performance.

Expectancy Theory of Motivation

A theory suggesting that individuals are motivated to act in a certain way based on their expectation that their actions will lead to their desired outcome.

Valence

The value a person assigns to work-related outcomes.