Futures contracts and forward contracts are both derivatives that allow parties to buy or sell an asset at a specified price at a future date. However, they have some key differences.

A. Futures have very low transaction costs - This is true. Futures contracts are traded on exchanges, which typically have lower transaction costs than over-the-counter markets where forward contracts are traded.

B. Futures generally have more liquid markets - This is also true. Futures contracts are standardized and traded on exchanges, which generally makes them more liquid than forward contracts.

C. Futures generally offer lower counter-party risk - This is true as well. Futures contracts are cleared through a clearinghouse that guarantees the performance of the contract, which reduces counter-party risk.

D. Futures are available on a greater range of products - This is generally not true. Forward contracts can be customized to fit any asset, quantity, delivery date, and delivery location, which makes them available on a wider range of products than futures contracts.

Therefore, the answer is D. Futures are available on a greater range of products.

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Futures contracts and forward contracts are both derivatives that allow parties to buy or sell an asset at a specified price at a future date. However, they have some key differences.

A. Futures have very low transaction costs - This is true. Futures contracts are traded on exchanges, which typically have lower transaction costs than over-the-counter markets where forward contracts are traded.

B. Futures generally have more liquid markets - This is also true. Futures contracts are standardized and traded on exchanges, which generally makes them more liquid than forward contracts.

C. Futures generally offer lower counter-party risk - This is true as well. Futures contracts are cleared through a clearinghouse that guarantees the performance of the contract, which reduces counter-party risk.

D. Futures are available on a greater range of products - This is generally not true. Forward contracts can be customized to fit any asset, quantity, delivery date, and delivery location, which makes them available on a wider range of products than futures contracts.

Therefore, the answer is D. Futures are available on a greater range of products.

Knowee AI · Accepted Answer

Futures contracts and forward contracts are both derivatives that allow parties to buy or sell an asset at a specified price at a future date. However, they have some key differences.

A. Futures have very low transaction costs - This is true. Futures contracts are traded on exchanges, which typically have lower transaction costs than over-the-counter markets where forward contracts are traded.

B. Futures generally have more liquid markets - This is also true. Futures contracts are standardized and traded on exchanges, which generally makes them more liquid than forward contracts.

C. Futures generally offer lower counter-party risk - This is true as well. Futures contracts are cleared through a clearinghouse that guarantees the performance of the contract, which reduces counter-party risk.

D. Futures are available on a greater range of products - This is generally not true. Forward contracts can be customized to fit any asset, quantity, delivery date, and delivery location, which makes them available on a wider range of products than futures contracts.

Therefore, the answer is D. Futures are available on a greater range of products.

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