Contingent Credit Risk on Derivative Contracts Is More Serious for Futures

question 46

True/False

Contingent credit risk on derivative contracts is more serious for futures contracts than for forward contracts.

---

Definitions:

Price Effect

The impact that a change in the price of a good or service has on consumers' demand for that good or service.

Output

The quantity of goods or services produced in a given time period.

Cartels

Formal agreements among competing firms in the same industry aimed at controlling production, fixing prices, and restricting competition.

Production

The procedure involved in producing goods and services.