Which One of the Following Is a Difference Between a Forward

question 1

Multiple Choice

Which one of the following is a difference between a forward contract and a futures contract?

• A)Forward contracts are based on commodities while futures contracts are based on financial instruments.
• B)The price of the asset exchanged is determined when a forward contract is entered while the price is set on the exchange date for a futures contract.
• C)A forward contract is a formal agreement while a futures contract is an informal agreement.
• D)Futures contracts are managed through an organized exchange while forward contracts are not.
• E)There are no differences between forward and futures contracts.

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