The difference between a futures contract and a forward contract is the:
A) Payoff profile of the buyer.
B) Payoff profile of the seller.
C) Settlement process.
D) Use of the spot rate versus the contract rate at settlement.
E) Ability to write a futures contract, but not a forward contract, on an exchange rate.

Question

Quizplus · Accepted Answer

Futures contracts are standardized and traded on exchanges with a daily settlement process (mark-to-market), while forward contracts are private agreements between parties with settlement at maturity.

The Difference Between a Futures Contract and a Forward Contract