The Advantage of Forward Contracts Over Futures Contracts Is That

question 14

Multiple Choice

The advantage of forward contracts over futures contracts is that forward contracts ________.

• A) are standardized
• B) have lower default risk
• C) are more flexible
• D) have higher default risk

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Definitions:

Trade Sales Promotion

A promotion that encourages resellers to purchase and aggressively sell a manufacturer’s products by offering incentives like sales contests, displays, special purchase prices, and free merchandise.

Free Merchandise

Products or goods given away at no cost to promote a brand, product, or service.

Premiums

Extra payments required for insurance coverage or additional costs added to the usual price of services or goods, often in exchange for higher quality or added benefits.

Fast Moving Products

Products that are sold quickly and in large volumes, often requiring frequent restocking.