Forward contracts are much easier to unwind than futures contracts due to the standardization of the contracts.

Question

Quizplus · Accepted Answer

This statement is incorrect. Futures contracts are actually easier to unwind than forward contracts due to the fact that they are traded on organized exchanges with standardized terms and can be offset or closed out at any time before expiration. Forward contracts, on the other hand, are customized agreements between two parties and not easily transferable to other parties.

Forward Contracts Are Much Easier to Unwind Than Futures Contracts