📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!


    Question

    In a futures contract, marking-to-market refers

    to:
    A Daily settlement of gains and losses. Correct Answer Incorrect Answer
    B The final delivery of the underlying asset. Correct Answer Incorrect Answer
    C The initial margin payment. Correct Answer Incorrect Answer
    D The process of hedging. Correct Answer Incorrect Answer
    E None of these Correct Answer Incorrect Answer

    Solution

    A key feature of futures exchanges. Profits and losses are calculated and credited/debited to traders' margin accounts at the end of each trading day, reducing counterparty risk.

    Practice Next
    ask-question