Similar to forward contracts, futures contracts are agreements to trade an asset for cash at a predetermined date in the future (Saunders & Cornett, 2011). However, unlike forward contracts, the value of the contract at the future date is determined through a daily marking to market (Saunders & Cornett, 2011). Additionally, the marking to market requires daily cash settlements on the value of the contract (Saunders & Cornett, 2011). Futures contracts are also traded on an excha...
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