A futures contract
A)is not traded on an organized exchange and is customized to meet the needs of the parties.
B)is not traded on an organized exchange and is subject to formal regulations which results in standardized contrasts.
C)is traded on an organized exchange and is subject to formal regulations which results in standardized contrasts.
D)is traded on an organized exchange and is customized to meet the needs of the parties.

Question

A futures contract
A)​is not traded on an organized exchange and is customized to meet the needs of the parties.
B)​is not traded on an organized exchange and is subject to formal regulations which results in standardized contrasts.
C)​is traded on an organized exchange and is subject to formal regulations which results in standardized contrasts.
D)​is traded on an organized exchange and is customized to meet the needs of the parties.

Quizplus · Accepted Answer

Futures contracts are standardized contracts traded on organized exchanges and subject to formal regulations. This standardization allows for ease of trading and liquidity in the market. While some aspects of the contract, such as delivery location, may be customizable, the core terms of the contract are the same for all participants.

A Futures Contract