The advantage of forward contracts over futures contracts is that forward contracts
A) are standardized.
B) have lower default risk.
C) are more liquid.
D) are none of the above.

Question

Quizplus · Accepted Answer

Forward contracts are not standardized, have higher default risk compared to futures contracts due to the lack of a clearinghouse, and are less liquid because they are over-the-counter agreements tailored to the needs of the contracting parties.

The Advantage of Forward Contracts Over Futures Contracts Is That