Answer: Futures

**Explanation:** - **Option A (Swaps):** Incorrect. Swaps are privately negotiated over-the-counter (OTC) agreements where counterparties bear the full default risk of each other, often without collateral. This makes swaps riskier in terms of counterparty default. - **Option B (Futures):** Correct. Futures are exchange-traded derivatives (ETDs) with standardized terms. The exchange requires collateral to mitigate counterparty default risk, making futures the least risky among the options. - **Option C (Forwards):** Incorrect. Forwards are OTC derivatives with less transparency and higher counterparty risk compared to exchange-traded instruments like futures.

Author: LeetQuiz Editorial Team