Why Is the Default Risk Much More Serious for Forward

question 70

Multiple Choice

Why is the default risk much more serious for forward contracts than for futures contracts?

• A)Because forward contracts are nonstandard contracts.
• B)Forward contracts are entered into bilaterally by the negotiating parties.
• C)For forwards, all cash flows are required to be paid at one time on contract maturity.
• D)Forwards are essentially OTC arrangements with no external guarantees in case of default.
• E)All of the above.

Identify the limitations and criticisms of both cognitive and behavioral theories.

Distinguish between the principles of reinforcement schedules in behavior modification.

Understand Freud's psychosexual stages and their sequence.

Recognize the development and role of defense mechanisms according to Freudian theory.

---

Definitions:

Neuron Polarity

The structural and functional difference between the axon and dendrites of a neuron, which determines the direction of nerve impulse transmission.

Potential Difference

The difference in electric potential energy per unit charge between two points in a circuit.

Voltage-Gated Channels

Protein channels in cell membranes that open or close in response to changes in electrical potential, allowing ions to pass in and out of the cell.

Repolarization

The process by which cells, particularly nerve and muscle cells, restore their membrane potential to a resting state after depolarization.