Question

What is "Marking to Market" in the context of futures contracts?

a.

It is the process of determining the initial margin for a futures contract.

b.

It is the process of settling the difference in the agreed-upon price and the daily futures price.

c.

It is the process of negotiating the terms of a futures contract.

d.

It is the process of physical delivery of the underlying asset in a futures contract.

Posted under IC 89 Management Accounting

Answer: (b).It is the process of settling the difference in the agreed-upon price and the daily futures price. Explanation:Marking to Market is the process of settling the difference in the prior agreed-upon price and the daily futures price in a futures contract.

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Q. What is "Marking to Market" in the context of futures contracts?
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