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One of the most basic difference(s) between currency forward and futures contrac

ID: 2620061 • Letter: O

Question

One of the most basic difference(s) between currency forward and futures contracts is (are) that Select one O a futures contracts have no daily limits on price fluctuations whereas forward contracts have a daily limit on price fluctuations b forward contracts have more credit risk than futures contracts forward contracts are negotiated with an organized exchange whereas futures contracts are bought and sold from banks d futures contracts are individually tailored while forward contracts are standardized

Explanation / Answer

forward contracts have more credit risk than futures contracts

since there is a margin requirement in futures, the credit risk is lesser

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