a standardized and exchange-traded agreement to buy or sell a particular asset on a specific date is best described as a:*

futures contract.

swap.

forward contract

which of the following statements about futures and the clearinghouse is least accurate? The clearinghouse:*

guarantees that traders in the futures market will honor their obligations.

requires the daily settlement of all margin accounts.

has defaulted on one half of one percent of futures trades

some forward contracts are termed cash settlement contracts. This means:*

at contract expiration, the long can buy the asset from the short or pay the difference between the market price of the asset and the contract price.

at settlement, the long purchases the asset from the short for cash.

either the long or the short in the forward contract will make a cash payment at contract expiration and the asset is not delivered.

which of the following statements about forward contracts is least accurate?*

The long promises to purchase the asset.

A forward contract can be exercised at any time.

Both parties to a forward contract have potential default risk.

default risk in a forward contract:*

only applies to the short, who must make the cash payment at settlement.

is the risk to either party that the other party will not fulfill their contractual obligation.

only applies to the long, and is the probability that the short can not acquire the asset for delivery.

if the margin balance in a futures account with a long position goes below the maintenance margin amount:*

a margin deposit equal to the maintenance margin is required within two business days.

a deposit is required to return the account margin to the initial margin level.

deposit is required which will bring the account to the maintenance margin level.