Question

What is a key characteristic that distinguishes a futures contract from a forward contract?

a.

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

b.

Forward contracts are written by a clearing house, while futures contracts are written by the parties involved.

c.

Futures contracts involve a clearing house, while forward contracts do not.

d.

Forward contracts have a specified delivery date, while futures contracts do not.

Posted under IC 89 Management Accounting

Answer: (c).Futures contracts involve a clearing house, while forward contracts do not. Explanation:A key characteristic distinguishing futures from forward contracts is that futures contracts involve a clearing house, providing standardization and a centralized exchange for buying and selling.

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Q. What is a key characteristic that distinguishes a futures contract from a forward contract?
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