The major difference between futures and OTC instruments like FRAs and interest rate swaps is that futures are:
A) Exchange-traded
B) Guaranteed
C) Standardised
D) All of the above

Question

Quizplus · Accepted Answer

Futures are exchange-traded, which means they are traded on a centralized exchange. They are also guaranteed by the exchange clearinghouse, which ensures that both parties fulfill their obligations. Additionally, futures contracts are standardized, meaning that they have a specified contract size, expiration date, and underlying asset, which makes them easier to trade and understand. Therefore, all of the above options are correct.

The Major Difference Between Futures and OTC Instruments Like FRAs