Comparing "Forward" and "Futures" Exchange Contracts, We Can Say That

question 71

Multiple Choice

Comparing "forward" and "futures" exchange contracts, we can say that

• A)they are both "marked-to-market" daily.
• B)their major difference is in the way the underlying asset is priced for future purchase or sale: futures settle daily and forwards settle at maturity.
• C)a futures contract is negotiated by open outcry between floor brokers or traders and is traded on organized exchanges, while forward contract is tailor-made by an international bank for its clients and is traded OTC.
• D)both b and c

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Definitions:

Categorical Statistics

A branch of statistics that deals with variables that can be categorized into distinct groups and analyzes the frequency and distribution of these categories.

Class Relations

The ways in which classes (or sets) relate to each other, including inclusion, exclusion, and intersection relationships.

Relative Frequency

A measure of the proportion of times an outcome occurs compared to the total number of trials or observations.

Babies

Very young offspring of humans, characterized by limited cognitive and physical abilities, requiring extensive care and nurturing.