Question

Comparing "forward" and "futures" exchange contracts, we can say that



A.
delivery of the underlying asset is seldom made in futures contracts.

B.
delivery of the underlying asset is usually made in forward contracts.

C.
delivery of the underlying asset is seldom made in either contract—they are typically cash settled at maturity.

D.
both a and b

E.
both a and c

Answer 1

Answer:

The correct option to answer your question will be option "D"

Explanation:

The main difference between these two kinds of exchange contracts will be on the frequency. In the case of futures, the delivery of the underlying asset is rarely made and in case of forward exchange contracts, the delivery of the underlying asset is usually made.