Which one of the following characteristics is similar in both futures and forward contracts?
A) Future asset transactions are conducted at a price agreed upon earlier.
B) Contracts are sold through organized exchanges.
C) Contract terms are standardized by type of commodity.
D)Price changes are settled daily in a process known as mark-to-market.

Question

Quizplus · Accepted Answer

Both futures and forward contracts involve buying or selling an asset at a predetermined price at a specific time in the future. The key similarity is that the transaction price is agreed upon at the time the contract is entered into, regardless of the market price at the time of delivery or settlement.

Which One of the Following Characteristics Is Similar in Both