Which of the Following Is NOT a Difference Between a Currency

question 37

Multiple Choice

Which of the following is NOT a difference between a currency futures contract and a forward contract?

• A) The futures contract is marked to market daily, whereas the forward contract is only due to be settled at maturity.
• B) The counterparty to the futures participant is unknown with the clearinghouse stepping into each transaction, whereas the forward contract participants are in direct contact setting the forward specifications.
• C) A single sales commission covers both the purchase and sale of a futures contract, whereas there is no specific sales commission with a forward contract because banks earn a profit through the bid-ask spread.
• D) All of the above are true.

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Definitions:

Rejection Region

In hypothesis testing, the range of values for which the null hypothesis is rejected in favor of the alternative hypothesis.

Test Statistic

A test statistic is a calculated value from sample data, used in statistical hypothesis testing to determine the likelihood of a given hypothesis.

Kleenex Tissues

A brand of paper tissues commonly used for personal hygiene and cleaning purposes.

Hypothesis Testing

A statistical approach that utilizes data from a sample to test a theory regarding a population's parameter.