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.

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Definitions:

Client

A person or organization receiving services from a professional or company under agreed terms.

Autobiographies

Written accounts of one's own life, often used in psychological studies to understand personality development and life experiences.

Historical Information

Recorded or gathered data about past events and conditions relevant to a particular subject or field.

Client's Memory

Refers to the recall and retention abilities of a client, often assessed in therapeutic or clinical settings.