A forward contract with the feature that gains and losses are realized on a daily basis, rather than at the settlement date, is called a(n) ________________ contract.
A) Floating.
B) Spot.
C) Option.
D) Swap.
E) Futures.

Question

Quizplus · Accepted Answer

A futures contract, unlike a forward contract, has the feature where gains and losses are realized and settled on a daily basis through a process called marking to market. This is a key difference from forward contracts, which are settled at the end of the contract term.

A Forward Contract with the Feature That Gains and Losses