The difference between a forward contract and a futures contract is:
A) The fact that the futures contract does not obligate the buyer while the forward contract does.
B) The fact that a forward contract must be paid in full at the onset while the futures contract does not.
C) The daily resettlement feature found in futures contracts but not in forward contracts.
D) The fact that a futures contract is a form of an option contract and a forward contract is not.
E) The fact that the forward contract is marked-to-the-market and the futures contract is not.

Question

Quizplus · Accepted Answer

Futures contracts include a daily resettlement feature (mark-to-market), where gains and losses are tallied each day. Forward contracts, in contrast, do not have this feature; their value is settled at the end of the contract term.

The Difference Between a Forward Contract and a Futures Contract