Introduction to Financial Markets (405) — CBSE Class 10 board question

(B) They are standardised and traded on exchanges.

Futures contracts are special types of forward contracts that are standardised exchange-traded contracts, unlike forwards which are customized.

Source: Types of Derivatives, Chapter 5

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The key distinction examiners test here is futures vs. forwards:

• Forwards → customized, OTC, higher counterparty risk (Options A, C, D describe forwards/OTC instruments).
• Futures → standardised, exchange-traded, lower counterparty risk (because the exchange acts as counterparty/clearinghouse).

Always remember: "Futures contracts are standardized exchange-traded contracts" — this exact phrase from the textbook is the basis for the correct answer.