A Forward Contract Differs from a Futures Contract in That

question 31

Multiple Choice

A forward contract differs from a futures contract in that:

• A)A forward contract calls for delivery on a specific date, whereas a futures contract permits the seller to decide later which specific day within the specified month will be the delivery date (if it gets as far as actual delivery before it is closed out).
• B)Unlike a futures contract, a forward contract usually is not traded on a market exchange.
• C)Unlike a futures contract, a forward contract does not call for a daily cash settlement for price changes in the underlying contract.Gains and losses on forward contracts are paid only when they are closed out.
• D)All of these are correct.

---

Definitions:

Heritable Trait

A characteristic that is genetically passed from parents to their offspring.

Sexual Reproduction

A biological process that involves the combination of genetic material from two parents to produce offspring with genetic variation.

Hermaphroditic Flower

A flower that contains both male (stamen) and female (pistil) reproductive structures, allowing it to self-pollinate or cross-pollinate.

Self-Fertilization

The process by which an organism fertilizes itself without the genetic contribution from another individual, common in some plant species and invertebrates.