Which of the following statements is least accurate concerning differences in the pricing of forwards and futures?
- Differences in the pattern of cash flows of forwards and futures can explain pricing differences.
- Pricing differences can arise if futures prices and interest rates are uncorrelated.
- Interest rate volatility can explain pricing differences.
B is correct. If futures prices and interest rates are uncorrelated, the prices of forwards and futures will be identical.
A is incorrect. The statement is true.
C is incorrect. The statement is true.
