Determine which of the following is NOT a distinguishing characteristic of futures contracts, relative to forward contracts. Question * A. Contracts are settled daily, and marked-to-market. B. Contracts are more liquid, as one can offset an obligation by taking the opposite position. C. Contracts are more customized to suit the buyer’s needs.
Determine which of the following is NOT a distinguishing characteristic of futures contracts, relative to forward contracts. Question * A. Contracts are settled daily, and marked-to-market. B. Contracts are more liquid, as one can offset an obligation by taking the opposite position. C. Contracts are more customized to suit the buyer’s needs.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Determine which of the following is NOT a distinguishing characteristic of futures contracts, relative to forward contracts. Question *
A. Contracts are settled daily, and marked-to-market.
B. Contracts are more liquid, as one can offset an obligation by taking the opposite position.
C. Contracts are more customized to suit the buyer’s needs.
D. Contracts are structured to minimize the effects of credit risk.
E. Contracts have price limits, beyond which trading may be temporarily halted.
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