Which of the Following Is a Major Difference Between Forwards

question 31

Multiple Choice

Which of the following is a major difference between forwards and futures?

• A)Forwards are marked to market, while futures are not.
• B)Futures are tailor made, while forwards are standardised.
• C)The default risk of futures is significantly reduced by the futures exchange guaranteeing to indemnify counterparties against credit risk, while this is not the case for forwards.
• D)Forwards are marked to market, while futures are not, futures are tailor made, while forwards are standardised and the default risk of futures is significantly reduced by the futures exchange guaranteeing to indemnify counterparties against credit risk, while this is not the case for forwards.

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