Lisa Cox feels that the price of corn is going to rise in the future and wants to lock in a price using either a futures or forward contract. She is unfamiliar with the differences between the two instruments and asks her associate, Matt Kudrow, to explain the differences. Which of Kudrow’s comments is TRUE In futures markets, the role of the clearinghouse is to:()
A. prevent arbitrage and enforce federal regulations.
B. act as guarantor to both sides of a futures trade.
C. reduce transaction costs by making contract prices public.
