A futures contract
A) is not exchange traded, therefore does not have a ready market value.
B) exposes the contracting party to credit risk.
C) does not require a margin account to be established.
D) is standardized as to amounts and dates.

Question

Quizplus · Accepted Answer

A futures contract is standardized as to amounts and dates. This means that all parties involved agree to the same contract specifications, including the quantity of the underlying asset being traded and the delivery date. This standardization allows for a more liquid and transparent market for futures contracts. A futures contract does expose the contracting party to credit risk as they are relying on the other party to fulfill their obligations, but it can be mitigated by establishing a margin account.

A Futures Contract