Explanation

The key difference between forward and futures contracts is the marking-to-market feature of futures contracts.

Forward Contracts:

• Are settled only at expiration
• Value can accumulate over time
• No daily settlement

Futures Contracts:

• Are marked to market daily
• Gains and losses are settled at the end of each trading day
• Contract value resets to zero after daily settlement
• This daily settlement process eliminates credit risk

Options B and C are incorrect because:

• Both forward and futures contract values are calculated based on carry benefits and financing costs
• The carry arbitrage model applies to both types of contracts

Therefore, the correct answer is A - futures contract values are zero at the end of each trading day due to the daily marking-to-market process.