An Advantage of a Forward Contract Over a Futures Contract

question 94

Multiple Choice

An advantage of a forward contract over a futures contract is that

• A) the terms of the contract are flexible.
• B) it is more liquid.
• C) it trades through a centralized market exchange.
• D) it is easier to unwind due to contract homogeneity.
• E) the counterparty is anonymous.

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Definitions:

Human Capital

Is the sum of useful skills and knowledge that an individual possesses.

Business Administration

The management and operational skills required to run a business effectively, including planning, organizing, staffing, leading, and controlling organizational resources.

Income Level

A measure of the amount of monetary earnings or revenue a person, family, or household receives within a specified time period, often used to gauge economic status.

Welfare State

A government system that provides a range of social security and welfare benefits to its citizens.