What Is a Difference Between a Forward Contract and a Future

question 65

Multiple Choice

What is a difference between a forward contract and a future contract?

• A)The settlement price of a forward contract is fixed over the life of the contract but in a futures contract is marked to market daily.
• B)Forward contracts are normally arranged through an organised exchange, while most futures contracts are OTC contracts.
• C)Both are essentially the same, except for the fact that the terms of a forward contract is set by the exchange, subject to the approval of the SFE.
• D)Delivery of the underlying asset almost always occurs on a futures contract but almost never occurs on a forward contract.

Comprehend the importance of matching verbal and non-verbal communication for effective interaction.

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Definitions:

Itemized Deductions

Expenses allowed by the IRS that can be deducted from adjusted gross income to reduce taxable income if chosen instead of the standard deduction.

AGI

Adjusted Gross Income refers to the total income reduced by certain deductions to ascertain the tax obligation.

Casualty Losses

Financial losses resulting from sudden, unexpected, or unusual events such as natural disasters, theft, or accidents, which may be deductible.

Adjusted Gross Income

Gross income after certain adjustments have been made, used as the basis for calculating taxable income on an individual's tax return.