There Are a Number of Differences Between Forward and Futures

question 61

Multiple Choice

There are a number of differences between forward and futures contracts. Which of the following statements is FALSE?

• A) Futures have less liquidity risk than forward contracts.
• B) Futures have less credit risk than forward contracts.
• C) Futures have more default risk than forward contracts.
• D) In futures, the exchange becomes the counterparty to all transactions.
• E) Futures have standardized terms of agreement.

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