Question: An important difference between a futures contract and a forward contract is that... More than one answer may be correct. A. Default risk is minimal

An important difference between a futures contract and a forward contract is that...

More than one answer may be correct.

A. Default risk is minimal in the futures markets, while default risk (at least in principle) is high in the OTC market for forward contracts.

B. Taking an offsetting position in the futures markets cancels the trader's obligations, while taking an offsetting position in a forward contract does not.

C. Futures are standardized contracts whose terms are defined by the futures exchange, whereas terms of a forward contract are defined by the parties to the contract.

D. Futures trade on a futures exchange, while a forward contract does not.

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