Futures contracts are highly standardized whereas forwards:
ACan be unique to parties
BMust be listed daily
CAre always cash settled
DCannot be hedged
Answer & Solution
Correct answer: A. Can be unique to parties
Being over-the-counter, forwards can be tailored in size, date and asset to the two parties.
Keep practising Futures Contract
Browse all Futures Contract questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
Between two parties, which risk is higher in a forward than in a futures contract?Exchange limits on position size tighten close to expiry mainly to:A mutual fund tracking the S&P 500 invests inflows quickly in stock index futures. This prBuying spot and selling forward when the forward exceeds its fair value earns:Which is a standard use of forward contracts according to finance theory?Foreign exchange forwards are usually quoted as the difference from spot in:In a currency forward, the agreed currency amounts that are specified in the contract are A foreign currency or stock index typically provides income on which basis for forward pri