Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Select all statements below that correctly distinguish currency forwards from currency futures:
Forwards are settled through clearinghouses.
Futures traded at the CME are resettled daily to mark the value of the contract to the market value.
Futures contracts are standardized in terms of currency amounts and expiration dates.
Forwards have limited liability. Futures have unlimited liability.
Forwards are customizable, over-the-counter (OTC) instruments.
Forward contracts can be negotiated for any expiration date. Futures contracts are always dated for the last Monday of each month.
Forward contracts do not have counterparty default risk.
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