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Which of the following is not a possible factor leading the forward price to differentiate from the future price with the same underlying asset and
Which of the following is not a possible factor leading the forward price to differentiate from the future price with the same underlying asset and expiration?
While future contracts are standardized, forwards offer more flexibility.
While future contracts are marked to market daily, forwards do not have daily settlements.
While future contracts have limited downside risk, forwards have unlimited downside risk.
While future contracts have minimized default risk, forwards have much greater exposure to default risk.
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