Derivatives - Derivatives Section 2

$70 added to the account.

$70 taken away from the account.

$75 taken away from the account.

Credit risk is virtually non-existent for both types of contracts.

Both types of contracts can be executed between private parties.

Both forwards and futures can be classified as forward commitments.

A swap is equivalent to a series of forward contracts, each created at the swap price.

A swap is equivalent to a series of long forward contracts, matched with short future contracts.

A swap is equivalent to a series of forward contracts, each created at their appropriate forward prices.

the party receiving the lower present value must compensate the other party with a cash payment at the start.

the party receiving the greater present value must compensate the other party with a cash payment at the start.

such a contract cannot legally be created.