GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A difference between forward and futures contracts is that
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futures contracts have negotiable delivery dates
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futures contracts involve no brokerage fees or other transactions costs
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forward contracts occur in a specific location - for example, the Chicago Mercantile Exchange
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forward contracts can be tailored in amount and delivery date to the needs of importers or exporters
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Explanation:
Detailed explanation-1: -Forward contracts are standardized and futures contracts are not. Forward contracts do not have a clearinghouse and futures contracts do. Forward contracts are not highly regulated and futures contracts are. Forward contracts are not exchange-traded and futures contracts are.
Detailed explanation-2: -A forward contract is a customizable derivative contract between two parties to buy or sell an asset at a specified price on a future date. Forward contracts can be tailored to a specific commodity, amount, and delivery date.
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