Discuss ICMA FMFQ Exam Topic 5 Question 31

Which of the following factors is true of forward contracts but not of futures contracts?

AThey are a means of fixing forward rates

BThey are flexible in terms of maturity rate

CThe deals are bilateral OTC contracts

DThey can be either bought or sold by market participants

Suggested Answer: C

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14 comments · newest first

Rebbecca 1 year ago

Flexibility in maturity? Sounds interesting, but I need to look into that!

Lonna 1 year ago

A is also true, but I think C is the main difference.

Josephine 1 year ago

Wait, are you sure about that? I thought both could be OTC.

Tonette 1 year ago

Totally agree with C! Futures are standardized, unlike forwards.

Casie 1 year ago

C is correct! Forward contracts are indeed bilateral OTC.

Justine 1 year ago

I feel like option B might be misleading; while forward contracts can have flexible terms, I’m not entirely sure if that’s the main difference from futures.

Shannon 1 year ago

I practiced a question similar to this, and I think option A could be correct since forward contracts do fix rates for future transactions.

Jacqueline 1 year ago

I remember that forward contracts are often customized and traded OTC, which might relate to option C about bilateral contracts.

Barney 1 year ago

I'm a bit unsure, but I think futures contracts are standardized and traded on exchanges, so maybe that makes forward contracts more flexible?

Dorothy 1 year ago

Hmm, I'm a bit confused on this one. I know there are commands related to logical volumes, but I can't quite remember the specific one for creating a backup snapshot. I'll have to think this through carefully.

Carma 1 year ago

Okay, let's see here. A data center's physical infrastructure would include things like servers, racks, switches, and other networking equipment. I'm leaning towards C as the best answer, but I'll double-check the other options just to be sure.

Sylvia 1 year ago

Hmm, this seems like a tricky one. I'll need to carefully consider the trade-offs between the committed use discounts and the spikes in CPU usage.

Jules 1 year ago

I always mix up conservative and matching financing. In this case, I want to say matching because they have specific assets in mind, but it's confusing!

Gilma 1 year ago

I think pay-as-you-go was mentioned in a similar practice question we did last week, so it might be relevant here too.

ICMA FMFQ Exam - Topic 5 Question 31 Discussion