Derivatives Q32
0. Which of the following statements is most accurate?
- A
A forward contract is default-free, whereas a futures contract is not.
- B
A forward contact allows parties to enter into a customized transaction, whereas a futures contract does not.
- C
A forward contract can easily be offset prior to expiration, whereas it is difficult to offset a futures contract prior to expiration.
- Option : B
- Explanation : Unlike futures contracts, which have standardized features, forward contracts can be customized to suit the needs of the parties involved.
