Question

Futures contracts are typically ____; forward contracts are typically ____.

1) sold on an exchange; sold on an exchange
2) sold in an over-the-counter market; sold on an exchange
3) sold on an exchange; sold in an over-the-counter market
4) offered by commercial banks; offered by commercial banks

Answer 1

Futures contracts are sold on an exchange, while forward contracts are sold in an over-the-counter market.

Step-by-step explanation:

Futures contracts are typically sold on an exchange; forward contracts are typically sold in an over-the-counter market. Futures contracts are standardized agreements to buy or sell an asset at a specific price and date in the future. They are traded on organized exchanges, such as the Chicago Mercantile Exchange. On the other hand, forward contracts are privately negotiated between two parties and are not traded on exchanges.