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Futures contracts are similar to forward contracts in that they both
Default Risk
The possibility that a borrower will fail to meet the obligations of a debt agreement.
Adjustable Maturity Dates
Adjustable maturity dates refer to the flexibility allowed in the due dates of financial instruments, allowing for changes in the repayment schedule.
Floating-Rate Bonds
Bonds with variable interest rates that adjust periodically based on a benchmark interest rate or index.
Coupon Rate
The interest payment made annually on a bond, shown in percentage terms of its face value.
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Q11: Futures contracts are similar to forward contracts
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