Discuss the difference between forward and future market

Expert Solution


	A future contract is an agreement between a buyer and seller to buy or sell an asset at a certain time in the future for a certain price.
	Similarly, a forward contract is also an agreement to buy or sell an asset at a particular time in the future for a certain price.

	The difference between forward and future contract are as follows:

	Forward	Future
	It is Private contract between two parties and is traded in over the counter market	Future contracts are traded on an exchange
	Forward contract asset size and type are not standardized	A future contract is standardized
	Gain or loss is realized at the maturity of the contract	Daily settlement of gain and losses i.e. marked to market
	Delivery of the asset usually takes place	The contract usually closes before the maturity
	It has usually one specific delivery date	It can have a range of delivery date
	There is a risk of default by the counterparty	There is no risk of default as the counterparty is the exchange

jeff jeffy answered 1 year ago

What is the difference between the forward contracts and future contracts?

4. What is the difference between the commodities traded in the forward market and the futures...

4. What is the difference between the commodities traded in the forward market and the futures market?

1) The main difference between a spot market transaction and a future market transaction is related to the:

1) The main difference between a spot market transaction and a future market transaction is related to the: a. Maturity of the Financial Instrument. b. Priority in the Capital Stack. c. Timing of Cash Flows. d. Cost of Capital. 2) Which of the following statements is true? a. Since Debt has priority in terms of payments from earning, it has a higher return. b. Since Equity has priority in terms of payments from earning, it has a higher return....

discuss how stock prices depend on future dividends and dividend growth. Also, discuss the difference between...

discuss how stock prices depend on future dividends and dividend growth. Also, discuss the difference between common and preferred stocks.

Explain the difference between a forward contract and a futures contract.

The difference between “store and forward telehealth” and “synchronized telehealth: is that:

what is the difference between a backward and a forward linkage with respect to railroads?

Describe the market for bonds and discuss the difference(s) between government and corporate bonds.

Briefly discuss the difference between the following pair: Limit order and at market order

Question 13 (1 point) Which of the following statement is incorrect about future & forward difference?...

Question 13 (1 point) Which of the following statement is incorrect about future & forward difference? Question 13 options: a) Future is traded on the exchange and the forward is traded over the counter b) Futures are marked to market and forward is settled at the maturity c) Futures virtually have no counterparty default risk and forward is subject to counterparty default risk d) Future is privately negotiated and forward is a standardized contract Question 14 (1 point) Major advantages...

Question