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name and briefly describe the functions of futures markets
futures markets provide a marketplace for persons interested in buying or selling commodities based on todays information and the perception of where prices will be in the future
what are similarities between a futures and a forward contract
both are agreements between two parties to make or take delivery of a particular good or service at a future date for a given price
what are the differences between a futures contract and a forward contract
- futures contracts trade openly and publicly on organized exchanges while forward contracts usually trade one on one or privatly between buyer and seller
- Futures contracts trade in a more liquid environment and teh market is often easier to enter and exit, Forward contracts are typically not fungible
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