What is the primary difference between a swap contract and a forward contract?
A) The underlying asset.
B) The number of exchanges.
C) Daily marking to the market.
D) A swap is an option while a forward contract is an obligation.
E) Payment on a swap is made at the time of the agreement while payment is made on the settlement date for a forward contract.

Question

Quizplus · Accepted Answer

Swap contracts involve multiple exchanges between the parties over the life of the contract, whereas forward contracts typically involve a single exchange at the contract's maturity.

What Is the Primary Difference Between a Swap Contract and a Forward