Which of the following statements is correct? Delivery usually takes place with forward contracts. This is NOT true for futures contracts. The flexibility to deliver the underlying asset at different locations tends to increase the futures price. Forwards and futures may both be traded in exchanges. The holder of a forward contract has the right (not the obligation) to buy the underlying asset at a prespecified price at the maturity date of the contract.
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This is NOT true for futures contracts." - This statement is incorrect. Both forward contracts and futures contracts can involve delivery of the underlying asset, although futures contracts are more standardized and often settled in cash. Show more…
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