A quot Futures Contract quot is a highly standardized contract with certain distinct features Which ...........

Economic Affairs Financial Markets

A "Futures Contract" is a highly standardized contract with certain distinct features. Which of the following is incorrect about Futures Contract?

1. In futures market actual delivery of goods takes place only in a very few cases

2. In case party decides to deliver goods, he can do so only at the location of the Association through which trading is organized

Codes

Only 1

Only 2

Both 1 & 2

Neither 1 nor 2

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Explanation:

2nd statement is incorrect regarding 'future contract'.
A futures contract is a legal agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future. Futures contracts are standardized to facilitate trading on a futures exchange and, depending on the underlying asset being traded, detail the quality and quantity of the commodity.