Futures Differ from Forward Contracts Because

question 92

Multiple Choice

Futures differ from forward contracts because

• A) Futures have more liquidity risk.
• B) Futures have more credit risk.
• C) Futures have more maturity risk.
• D) None of the above
• E) All of the above

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Definitions:

Net Benefit

The total benefits of a decision or action, subtracting any associated costs, reflecting the overall value or payoff.

Equitable Distribution

The fair and just allocation or distribution of resources among members of a society.

Pareto Optimal

A state of allocation of resources from which it is impossible to reallocate to make any individual or preference criterion better off without making at least one individual or preference criterion worse off.

Potentially Efficient

A situation or system that has the capacity to achieve efficiency but has not yet achieved it.