Question: What is a difference between Futures Contract and Forwards Contract?

What is a difference between Futures Contract and Forwards Contract?

Step by Step Solution

★★★★★

3.41 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

Solution The Futures Contract The Futures contracts also referred to as Futures are those standardiz... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Economics Questions!

Q:

Presented below is selected information for Novak Company for the month of March 2022. Cost of goods sold Freight-out 6,080 Insurance expense 5,230 Salaries and wages expense 56,720 (a) $230,000 Rent...

Q:

What is a difference between the organizational structure of private equity funds and hedge funds?

Q:

What is the difference between a futures contract and an option contract? Do the buyer of a futures contract and the buyer of an option contract have the same rights? What about the seller?

Q:

What is a difference between Futures Contract and Forwards Contract

Q:

Hedging foreign currency risk with forward contracts only for FCY risk, what is the difference between futures market and forward contract( main differences )Options , how different from forward...

Q:

What is the difference between the long and the short positions in a contract for the future delivery of the S&P 500 stock index? If you expect stock prices to fall, do you buy or sell stock index...

Q:

What is the difference between initial margin and variation margin of a futures contract? Provide a simple example to explain your answer.

Q:

a) What is the difference between a stock and a strip hedge? b) How do Beta and hedge ratio relate to each other? c) Determine the hedge ratio for a stock portfolio that has a beta of 0.80 relative...

Q:

Suppose that the spot rate of EUR is 1.0951 USD for 1 Euro. 1 year forward rate is 1.0963 USD for 1 Euro. Suppose that the 1 year USD interest rate is 0.65% annualized and Euro interest rate is 0.01%...

Q:

What is the difference between futures and forward contracts? A) Futures give the buyer the option of buying or selling currency at the futures price, while forward contracts create obligation to buy...

Q:

A . In 2019, PT KLM changed the estimated useful life of its machines. Previously, machines purchased in early 2017 at a price of Rp. 250,000 were estimated to have a useful life of 5 years with a...

Q:

Consider population data with = 20 and = 2. (a) Compute the coefficient of variation. (b) Compute an 88.9% Chebyshev interval around the population mean.

Q:

Find the derivative of f ( x ) = - 4 x 4 . Provide your answer below: f ' ( x ) =

Q:

Recent balance sheet information for two companies in the snack food industry, The Hershey Company (HSY) and Mondelez International, Inc. (MDLZ), is as follows (in millions of dollars): a. Determine...

Q:

Costco Wholesale Corporation (COST) and Wal-Mart Stores Inc. (WMT) compete against each other in general merchandise retailing, gas stations, pharmacies, and optical centers. Below is selected...

Q:

Hasbro (HAS) and Mattel, Inc. (MAT), are the two largest toy companies in North America. Liability and stockholders' equity data from recent balance sheets are shown for each company below (in...

Q:

A bond has a $1,000 par value, 10 years to maturity, and a 7% annual coupon and sells for $985. a. What is its yield to maturity (YTM)? b. Assume that the yield to maturity remains constant for the...

Q:

Leadbetter Inc. reports the following for 20Y3: Income from continuing operations before income tax ..... $766,250 Extraordinary property loss from hurricane .......... $60,000* Gain from...

Q:

After looking at the figure above, explain the reason for the significant difference in Nitrate concentration that occurred between 1966 and 1970 in terms of the two lines representing the...

Q:

1. Which of the following statements about the mechanics of futures contracts is false? a. All futures contracts are made with a futures exchange, not with an individual. b. Investor A might buy a...

Q:

With the listed terms give their definition and 1 significance in terms of economics or international political relations. 1) New International Economic Order: - Definition: - Significance: 2)...

Q:

1 pts Question 1 All of the following are differences between forward and futures contracts, EXCEPT: No exception, all of the listed are differences between forward and futures contracts Flexible vs...

Q:

1. Which of the following statements is false? a. A spot price is a price today for immediate delivery. b. If a Canadian firm has to pay U.S. dollars in the future, it worries about the potential...

Q:

6. Which of the following is not a difference between futures and forwards? I. Futures are liquid, forwards are not. II. Futures do not incur counterparty default, forwards can. III. Futures are...

Q:

It is becoming widely expected that interest rates will rise in the coming year. In recent weeks the 10 year US bond has risen from about 1.50% to 1.80%. Using the appendix for chapter 2 on Webster...