Which of the Following Is NOT a Difference Between a Currency

question 37

Multiple Choice

Which of the following is NOT a difference between a currency futures contract and a forward contract?

• A) The futures contract is marked to market daily, whereas the forward contract is only due to be settled at maturity.
• B) The counterparty to the futures participant is unknown with the clearinghouse stepping into each transaction, whereas the forward contract participants are in direct contact setting the forward specifications.
• C) A single sales commission covers both the purchase and sale of a futures contract, whereas there is no specific sales commission with a forward contract because banks earn a profit through the bid-ask spread.
• D) All of the above are true.

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Definitions:

Value-based Pricing

A pricing strategy where the price is based on the perceived or estimated value of a product or service to the customer, rather than the cost of production.

Operating Costs

Expenses associated with the normal business operations, including cost of goods sold and operational overhead.

Operating Cost

Expenses associated with the day-to-day functions of a business, including costs for rent, utilities, and payroll.

Useful Life

The estimated period over which an asset is expected to be usable for its intended purpose, affecting depreciation calculations.