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.