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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Definitions:

Social Responsibility

The idea that businesses should balance profit-making activities with activities that benefit society; it involves developing businesses with a positive relationship to the society in which they operate.

Profits

The financial gains obtained after subtracting the costs and expenses from the total revenue generated by a business or investment.

Ethic Of Care

A moral theory emphasizing the importance of interpersonal relationships and compassion in ethical decision-making.

Human Relationships

The complex interactions and connections between individuals in various social, professional, or familial settings.