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kherson [118]
2 years ago
10

5. What are futures contracts and forward contracts? Describe two differences between them.

Social Studies
1 answer:
mamaluj [8]2 years ago
3 0

Futures Contract:-  A contract which is a legal agreement to buy or sell a particular commodity asset or security at a predetermined price at a specified time in the future.

Future contracts are Standardized for quality and quantity trade.

The asset Transacted is usually a commodity instrument.

Traded on a future exchange.

Forward Contract:- A contract between two parties which is sellers and buyers on a particular transaction which is to be carried out or executed at a later date.

Can be used for hedging or speculation.

It is a non- standardized nature makes it particularly for hedging.

Trade in the over the counter market hence do not trade on the exchange.

To further know more about the Future Contract and Forward Contract refer to the link given below:

brainly.com/question/15581105

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