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All main topics / Finance & Investment / Derivatives / Derivatives
Which of the following is NOT true about forward and futures contracts?
A.Forward contracts are more liquid than futures contracts
B.The futures contracts are traded on exchanges while forward contracts are traded in the over-the-counter market
C.In theory forward prices and futures prices are equal when there is no uncertainty about future interest rates
D.Taxes and transaction costs can lead to forward and futures prices being different
Answer: A
Futures contracts are more liquid than forward contracts. To unwind a futures position it is simply necessary to take an offsetting position. The statements in B, C, and D are correct
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Flashcard info:
Author: CoboCards-User
Main topic: Finance & Investment
Topic: Derivatives
Published: 27.10.2015




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