The difference between a forward contract (in currency) and a futures contract (in currency) is that O futures contract is customized to the buyer's need while a forward contract is standardized O forward contract is customized to the buyer's need while a futures contract is standardized there is no difference between them - both locks in at a given rate Question 12 Foreign exchange risk arises because the foreign government may confiscate your investment the Fed may change the exchange rate O the domestic government can impose tax when you bring the money home the exchange rate may change against you when you convert into another currency Speculators foreign currencies in the currency market. o buy and sell buy o sell watch You buy a futures contract in British pound from a Commercial bank Stock exchange O Currency exchange O Currency dealer