A futures contract can be differentiated from a forward contract in that a futures contract:
A)is organised through an exchange.
B)can be 'closed out' or 'reversed' at any time.
C)is exactly the same as a forward contract.
D)is organised through an exchange and can be 'closed out' or 'reversed' at any time.

Question

Quizplus · Accepted Answer

A futures contract is organised through an exchange and can be 'closed out' or 'reversed' at any time. These are key differences that set futures contracts apart from forward contracts, which are over-the-counter agreements between two parties and cannot be traded on an exchange.

A Futures Contract Can Be Differentiated from a Forward Contract