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A risk manager is deciding between buying a futures contract on an exchange and entering into a forward contract directly with a counterparty on the same underlying asset. Both contracts would have the same maturity and delivery specifications. The manager finds that the futures price is lower than the forward price. Assuming no arbitrage opportunity exists, and interest rates are expected to increase, what single factor acting alone would be a realistic explanation for this price difference?
A
The futures contract is less liquid than the forward contract.
B
A futures contract offers more flexible terms than a forward contract.
C
The price of the underlying asset is strongly negatively correlated with interest rates.
D
The upfront transaction cost on the futures contract is higher than that on the forward contract.