A futures contract is chegg. com Futures contracts are standardized, have lower default risk and are liquid. allow the seller to deliver any day during the delivery month. You are the chief risk officer for the Tasty Candy Company. . forward contracts have a fixed price at settlement. Futures differ from forwards because they are standardized contracts; marked to market daily. Long positions and short positions in a futures contract have certain requirements for the investor regarding delivery of the underlying commodity. e. b. Hi, A future contract is a legal co … Not the question you’re looking for? Post any question and get expert help quickly. forward contract values can be tied to commodity prices. Your firm purchases sugar and cocoa as ingredient inputs for the Read up on the definitions of short and long positions in futures contracts; a buyer of a futures contract is said to be in a long position. allow the parties to negotiate the contract size. futures contracts do not have a predetermined settlement date. mark to the market on a weekly basis. Which of the following accurately describes the requirement for long positions and short positions? Question: What is a futures contract? What is a futures contract? Here’s the best way to solve it. Question: Unlike forward contracts, futures contracts: a. Question: A futures contract differs from a forward contract in thatMultiple choice question. To identify the difference between a forward contract and a futures contract, you'll need to understand the basic definitions of both terms and differentiate them based on properties such as their trading locations and risk management. c. The advantage of forward contracts over futures contracts is that forward contracts are more flexible. to exchange a specified quantity of goods on a specified date in the future at the current market price. Question: Forward contracts and futures contracts can be used for hedging. Sometimes, it’s appropriate to use a futures contract instead of a forward one. Question: A futures contract is an agreement that involves the future exchange of asset and cash where the price and date of the exchange is set in the beginning. See full list on corporatefinanceinstitute. Futures contracts are widely used for hedging price risk and for speculative trading in commodities, currencies, and financial instruments. Here’s the best way to solve it. Jun 10, 2025 ยท Learn about the basics of futures contract specifications, including notional value and tick size. Futures contracts allow market participants to capture trading opportunities based on the price movements of commodities, currencies, equity indexes, and interest rates. forward contracts are publicly traded. Contracts are traded at futures exchanges, which act as a marketplace between buyers and sellers. d. Sometimes it’s more appropriate to use a forward contract instead of a futures contract. provide an option for the buyer, rather than an obligation. require contract fulfillment by the two originating parties. bjks stx myc wpqb wgfnj qpukr bsirl qque qvodw wdtbid