Question

    Which of the following are usually trader over the counter:

    A Futures contracts Correct Answer Incorrect Answer
    B Forward contracts Correct Answer Incorrect Answer
    C Option contracts Correct Answer Incorrect Answer
    D ETFs Correct Answer Incorrect Answer
    E Exchange-Traded Commodities Correct Answer Incorrect Answer

    Solution

    Forward contracts are typically traded over-the-counter (OTC) rather than on exchanges. OTC contracts are privately negotiated between two parties and are not standardized like exchange-traded contracts. The terms of a forward contract, such as the underlying asset, the quantity, the price, and the delivery date, are customized to meet the needs of the parties involved.

    Practice Next

    Relevant for Exams:

    ×
    ×