In contrast to a forward contract, a futures contract:
A: trades over-the-counter.
B: is initiated at a zero value.
C: is marked-to-market daily.
A: trades over-the-counter.
B: is initiated at a zero value.
C: is marked-to-market daily.
举一反三
- Which of the following is most likely to be a feature common to both forward and futures contracts? A: Daily marking to market of contracts B: Standardization of the contract’s terms and conditions C: Their use for hedging or speculation
- To the holder of a long position, it is more desirable to own a forward contract than a futures contract when interest rates and futures prices are: A: negatively correlated. B: uncorrelated. C: positively correlated.
- Which of the following statements is most accurate() A: Forward contracts require that both parties to the transaction have a high degree of creditworthiness. B: Forward contracts are marked to market daily. C: Futures contracts have more default risk than forward contracts.
- During its life, the value of a forward contract is most likely equal to the price of the underlying minus the price of the: A: forward. B: forward, discounted over the original term of the contract. C: forward, discounted over the remaining term of the contract.
- The price of a forward contract most likely: A: decreases as the price of the underlying goes up. B: is constant and set as part of the contract specifications. C: increases as market risk increases.