Polytot 6/04

Dear Tutor,

I am a bit confused about the following statement written in the answer to this question.

“Of these two methods, the forward contract has less risk and requires less administration, though in this case it is predicted to produce slightly worse results”

Is the statement about less administration true, because for futures gain and losses are calculated on a daily basis? Additionally, does the statement about less risk relate to the fact that the futures are traded on exchange and there is the issue of basis risk?

Thank you