Question

How is the repricing of futures contracts different from forward contracts?

a.

Futures contracts are not repriced every day, unlike forward contracts.

b.

The repricing of futures contracts is done at the end of the contract, unlike forward contracts.

c.

Unlike forward contracts, futures contracts are repriced every day.

d.

Both futures and forward contracts are repriced in the same manner.

Posted under IC 89 Management Accounting

Answer: (c).Unlike forward contracts, futures contracts are repriced every day. Explanation:Unlike forward contracts, the repricing of futures contracts is done daily. Any resulting profit or loss is debited or credited to the margin account of the broker.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. How is the repricing of futures contracts different from forward contracts?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What has been the growth trend of derivatives market in India since June 2000?

View solution

Q. What is the basic reason for the emergence of a well-functioning derivative market in India?

View solution

Q. Which of the following statements best defines Financial Risk Management?

View solution

Q. What is the primary purpose of using derivatives in financial risk management?

View solution

Q. What are the two main categories of derivatives based on the market place?

View solution

Q. What does a Forward contract represent in the context of financial derivatives?

View solution

Q. What is a key characteristic that distinguishes a futures contract from a forward contract?

View solution

Q. What is the primary difference between a Call Option and a Put Option?

View solution

Q. What distinguishes an American Option from a European Option based on maturity date?

View solution

Q. What is the purpose of a Credit Derivative, such as a Credit Default Swap (CDS)?

View solution

Q. __________ is an instrument, which is embedded in another contract known as host contract.

View solution

Q. In which of the following types of options does the owner have the right to require the sale to take place on (but not before) the maturity date.

View solution
View All MCQs on IC 89 Management Accounting

Recommended Subjects

Are you eager to expand your knowledge beyond IC 89 Management Accounting? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Environmental Biotechnology

Discover the intersection of biology and environmental science with our Environmental...

Chemistry

Unlock the mysteries of chemistry with our Chemistry category. Delve into the...

Automotive Engine Design

Embark on a thrilling exploration of Automotive Engine Design, where the intricacies...

Geotechnical Engineering

Dive into the world of Geotechnical Engineering with our dedicated category. Explore...

Instrumentation Transducers

Master the art of instrumentation and transducers with our specialized category....

Mechanical Engineering

Explore the world of Mechanical Engineering with our specialized category. Dive into...

Microbiology

Uncover the fascinating world of microbes with our Microbiology category. Delve into...

Analytical Instrumentation

Dive into the world of precise measurements with our Analytical Instrumentation...

Marketing and Marketing Management

Uncover the strategies and tactics of marketing with our Marketing and Marketing...