CFA Practice Question

There are 206 practice questions for this study session.

CFA Practice Question

Which of the following statements is not true of forward contracts?
A. Forward contracts have no clearinghouse to guarantee performance. They trade over-the-counter.
B. Forward contracts are highly standardized and carefully specified.
C. Forward contracts may be used to reduce uncertainty about the price at which a future exchange will take place.
Explanation: Forward contracts may be put to the same uses as futures contracts. Forward contracts, however, are over-the-counter instruments with no clearinghouse and with terms customized for particular situations.

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andy4cfa Future is highly standardized
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