Based on your understanding of forward and futures contracts,identify the differences between the two: Forward Futures Contracts Contracts These are exchange traded standardized contracts to buy or sell an asset at a specific time in the future at a specified delivery price. For the execution of these contracts, brokers require both parties to maintain margin accounts or performance bonds to ensure that payments are made when the contract matures These are nonstandardized contracts to buy or sell an asset at a specific time in the future at a specified delivery price. Which of the following are used to hedge against price changes for input materials? O Financial futures Commodity futures Mall Toys Co., an American company, has purchased 4 million worth of equipment from a French company. Payment for the equipment is not due for six months. Mall Toys Co. does not want to give up the free-trade credit, but it also wants to make sure that the dollar cost of 4 million does not rise over the next six months. Which of the following actions would allow Mall Toys Co. to lock in the dollar cost of the equipment? O Take a long position in foreign exchange futures O Take a short position in interest rate futures O Take a short position in foreign exchange futures O Take a long position in interest rate futures