Question

How does a futures contract differ from a forward contract?

a.

Futures contracts are non-standardized, while forward contracts are standardized.

b.

Futures contracts are negotiated between parties, while forward contracts are written by a clearing house.

c.

Futures contracts are standardized contracts written by a clearing house, while forward contracts are non-standardized contracts written by the parties themselves.

d.

Futures contracts are used for commodities, while forward contracts are used for financial assets.

Posted under IC 89 Management Accounting

Answer: (c).Futures contracts are standardized contracts written by a clearing house, while forward contracts are non-standardized contracts written by the parties themselves. Explanation:A futures contract is a standardized contract written by a clearing house that operates an exchange, while a forward contract is a non-standardized contract written by the parties themselves.

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