The Main Distinction Between a Forward and a Futures Contract

question 12

Multiple Choice

The main distinction between a forward and a futures contract is:

• A) a forward contract has a final cash flow,while a futures contract has daily cash flows
• B) a forward contract requires no collateral,while a futures contract requires traders to post margins
• C) a forward trade is usually closed out early,while a futures trade usually ends with physical delivery
• D) a forward trade requires cash settlement,while a futures trade does not require this
• E) minor-they are the same contracts

---

Definitions:

Active Listening Skills

A technique of listening that involves paying full attention, understanding, responding, and remembering what is being said.

Nonverbal Skills

Abilities related to understanding and expressing oneself without the use of spoken language, including gestures, facial expressions, and body language.

Passive Communication

A communication style where the individual does not express their needs or desires clearly, often leading to misunderstandings.

Disregard Wants

Ignoring or overlooking the desires or preferences of oneself or others.